One of the more eye-catching announcements in George Osborne's Budget was the unveiling of a "Help to Buy" Isa.

Not leaked beforehand, Osborne said first-time buyers will receive a helping hand from the government to get on the property ladder. For every £200 saved by first-time buyers, the taxpayer will chip in another £50.

Those who manage to save up £12,000 would benefit to the tune of £3,000 towards their new home. With housing at the top of many voters' agendas, especially in London and the south, the chancellor will be hoping the scheme will be as popular as his original Help to Buy scheme.

But the criticisms have already begun with experts and economists warning the policy could fuel further house price rises – putting home ownership even further out of the hands of the next generation.

Sam Bowman, deputy director of the Adam Smith Institute (ASI), said:

The most depressing big announcement was the "Help to Buy Isa", which will subsidise first-time buyers’ savings pots. This will stoke up demand even more in a housing market that is suffering from insufficient supply. Throwing more money at the demand side will not solve the housing crisis – the country needs planning reform so that it is easier to build on Green Belt land. The only thing this policy will Help to Buy is the election.

The Institute of Economic Affairs' Director General Mark Littlewood was even more scathing in his criticism. "Not only is the introduction of a ‘Help to Buy ISA’ economically illiterate, but such a measure will serve to increase demand in a housing market characterised by scarce supply", said Littlewood .

He added "What we really need to help everyone struggling with the high price of housing is planning liberalisation to allow more building and reduce housing costs for ordinary people".

All political parties have struggled to find a coherent response to Britain's housing crisis. Less than 10 per cent of Britain's land is built on and even less is under concrete. So why is there so much land but so few affordable homes?

Much of the academic evidence suggests that Britain's antiquated planning laws are to blame for the country's lack of affordable housing. A recent ASI paper argued freeing up just 3.7 per cent of the London Green Belt would make enough space available to build 1m homes, equivalent to London's housing needs for the next 10 years. However, estate agents are welcoming the chancellor's latest attempt to help first time buyers.

"This is exactly what is needed to engage the first time buyer market, particularly as we have seen the current criteria under the MMR constraining aspirations to buy a home", said Mark Hayward, managing director of the National Association of Estate Agents.