Experts and Property Companies Doubt George Osborne Housing Plan

Britain's Chancellor of the Exchequer (Finance Minister) George Osborne on Wednesday, spoke to the House of Commons to present the bi-annual budget review. He put housing as top priority and pledged to build 400,000 new affordable houses in England over the next five years. Nevertheless, some big property companies are pessimistic about the plan.

According to Business Insider, a host of big property companies have "serious concerns" about his plans, which many think will benefit the already well-off while hitting the country's poorest. One property agent even says that the Osborne plan is "abandoning the millions of people who rent in this country."

The plan to provide affordable housing also come with the increase of stamp duty, tax on completed property transaction. It means that everyone who buy their second home will pay 3% higher tax on normal stamp duty. This will charge higher taxes on buyers of the second home and also homeowner who rented their houses, known as buy-to-let homeowners.

The Guardian reported that according to experts, the new measures would deter landlords from buying up properties, but could also "turbo-charge" house prices in the short term. Prior to tax increase comes into force in April, investors will race to buy houses.

George Osborne's plan was aimed to tackle crisis of home ownership in England. As he said, "15 years ago, around 60% of people under 35 owned their own home, next year it's set to be just half of that," and this housing plan is, "a bold plan to back families who aspire to buy their own home."

According to the plan, in the year 2021 the policy would raise almost £1 billion ($1.51 billion) a year. 60% of the amount will be reinvested in local communities in London and the places like Cornwall.

The Telegraph reported that the housing plan is targeted to help villages build discounted homes. George Osborne also warned that lack of housing in the countryside is a "scandal" and vows to ensure that children are not forced out of villages because of the lack of affordable homes.

George Osborne also told The Telegraph that England is experiencing a "flight from city to country" as more than 60,000 people a year move to rural areas. This is a social trend that only happens in England, because in other developed countries, rural to urban is the typical migration.

The government housing plan seems to be disconnected from business interest of property industry. The property focuses more on house rental sector, while the government wants people to own their own home.