And he said that next month’s increase in stamp duty on would undoubtedly act as a further deterrent to transacting properties above £1million and would impact most on higher-rate taxpayers living in London and the south east.
"Those who are trying to sell around the £1million mark will be under intense pressure to keep prices under this figure, which will discourage them from selling, further limiting an already short supply of homes in prime areas," he said.
Stuart Law, Chief Executive of Assetz, said: "Tens of thousands of first-time buyers need help, and I hope the Government uses the £250million pledged to the new Firstbuy scheme wisely. Rather than just help 10,000 first time buyers raise 25% deposits on average, it would be sensible to help a significant number of first-time buyers raise 10% deposits, since 85% and 90% LTV mortgages are available at reasonable rates.
"I do welcome the news that stamp duty charges will be changing for the bulk purchase of property, so investors will pay tax based on the individual property prices rather than the total purchase price. This will provide a significant boost to the private rental sector by encouraging more professional landlords and larger institutional investors to build up their portfolios, boosting the supply of much-needed homes for rent."
And Nicholas Leeming, business development director at Zoopla.co.uk, said: "Any measures to help first-time buyers are welcome, particularly when they’re set to help the construction industry as well as the housing market.
"According to the CML, first-time buyers currently pay an average deposit of £25,000, this would plummet to an initial £6250 – a very appealing prospect.
"But Osborne’s First Buy scheme won’t go beyond scratching the surface of the problem faced by the vast majority of first-time buyers as it’s exclusively for new build properties and only around 11,000 buyers will benefit – a fraction of the overall number of potential first-timers.
"Mortgages are still required and this scheme leaves lenders, who have had a stranglehold on the market for the last two years, in a win-win situation. Being able to lend to a select group of first-time buyers without the normal level of risk makes lending to those who don’t qualify for the scheme even less attractive. And while the availability of credit is slowly easing, it’s not easing fast enough to help those borrowers who don’t qualify. A step in the right direction these measures may be, but they’re merely window dressing the wider problem."
Meanwhile, the Council of Mortgage Lenders welcomed the "modest" support measures announced for housing – but said they were unlikely to create a fundamentally different landscape for home-buyers.
CML chief economist Bob Pannell said: "Chancellor Osborne has adhered closely to the fiscal script set out in his first Budget. Today’s indirect tax announcements will marginally soften the impact of significant fiscal cuts for household finances, but do not alter our forecast of a challenging year for households and the housing market this year."
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