Housebuilders’ shares dropped as Philip Hammond announced plans for a review into land banking, which ­included the potential use of compulsory purchase orders.

But developers were sanguine about the threat posed on the highly politically charged issue, in which they have been accused of sitting on land with planning permission but not building in order to maximise profits. The Government has already suggested this policy in the housing White Paper in February, and this will be the fifth review on the issue since 2004, which all found housebuilders did not land bank.

The Chancellor also unexpectedly announced that the Government would scrap a capital-gains tax exemption for foreign owners of UK property from April 2019. This means that non-residents will be subject to the tax on any sales of property, which could have a significant impact on a market that is heavily dominated by foreign investors. Institutional investors, such as pension funds, are likely to still be ­exempt. Ion Fletcher, from the British Property Federation, said it “will jeopardise this much needed investment”.

The Chancellor also confirmed that the Government’s new housebuilding target is 300,000 homes a year, cut stamp duty for first-time buyers under a £300,000 threshold, and announced £44bn of money for housing over the next five years, around £15.3bn of which is new spending. The new money was focused on funds to help SME builders and develop infrastructure that can lead to new housing, while planning changes included a move to build more densely in urban areas. Councils were also given the ability to raise the tax premium on empty homes. Analysts at Capital Economics said that “on the issue of planning reform and fresh measures to boost supply, the Chancellor did little more than kick the can down the road”.