Help to Buy plan ‘will worsen Scotland’s housing crisis’, Common Weal warns

Announced by the first minister at the SNP conference earlier this month, the £100 million First Homes Fund aims to support first-time buyers onto the housing ladder with grants of up to £10,000 towards a deposit.

In a new briefing, Common Weal argues that the policy ignores the fundamental issue driving Scotland’s housing emergency: the price of homes.

Help to Buy schemes have been repeatedly deployed across the UK over the past decade, but Common Weal says the evidence is now overwhelming that they do not increase housing supply. Instead, they raise prices by injecting public subsidy into a market dominated by a handful of major developers.

Citing previous evaluations, the briefing highlights a London School of Economics study which found that one iteration of the scheme in the capital pushed house prices up by six per cent without generating any additional supply.

“The housing crisis is a crisis of price, not demand,” the briefing states. “There is no shortage of people who want a home—only a shortage of people who can afford one.”

The think tank also points to the Scottish Government’s own assessment of its previous Help to Buy programme, which concluded that many recipients would have been able to buy a home without state assistance.

With the average first‑time buyer deposit in Scotland around £20,000, Common Weal argues that a £10,000 government loan will only benefit those who already have substantial savings, “precisely the people who are not the primary problem.”

The briefing is sharply critical of the structure of Scotland’s new‑build market, where around 70% of supply is controlled by a small group of volume developers, including Barratt, Persimmon, Taylor Wimpey, Bellway, Miller Homes and Vistry Group.

Because Help to Buy loans can only be spent on purchasing homes, Common Weal argues that the policy effectively channels public money directly into the profits of these firms.

According to the think tank, large developers controlled just 42% of the new‑build sector a decade ago, while today, the average new‑build home in Scotland costs nearly £430,000, with developers taking an estimated £40,000 in profit per unit.

Common Weal suggests that governments repeatedly return to Help to Buy not because it works, but because it appeals to a politically influential demographic.

“Middle‑class young people looking to buy a house are more likely to vote than those reliant on social housing,” the briefing argues. “But mostly, governments make housing policy with and for the big developers.”

Over the next two years, the think tank expects a clash of narratives. Developers will argue that planning rules and regulation are constraining supply. Housing experts, meanwhile, will warn that affordability ratios, not bureaucracy, are the core issue.

The briefing urges the Scottish Government to reject developer‑led solutions and instead pursue policies that directly tackle affordability. These include:

• expanding public rental supply
• reforming property taxation to curb price inflation
• strengthening rent controls
• bringing Scotland’s 100,000 empty homes back into use
• investing in high‑quality public rental housing

Common Weal says pushing for this alternative approach will be a “key strategic goal” for the organisation over the next 18 months.