The government has used the Autumn Budget to abolish stamp duty for first-time buyers on purchases of up to £300,000.
First-time buyers will also receive a stamp duty holiday for the first £300,000 on purchases up to £500,000.
Launching the policy, the chancellor said 80 per cent of first-time buyers will pay no stamp duty as a result of the change.
However, in its analysis of the stamp duty holiday, the Office for Budget Responsibility (OBR) said that the policy will increase house prices by 0.3 per cent, meaning that ultimately, homeowners would benefit most.
The impact on house prices will be felt in 2018, the OBR said.
"We assume that a temporary relief would feed one-for-one into house prices, but a permanent one will have twice that effect," the OBR said.
"Thus the main gainers from the policy are people who already own property, not the first-time buyers themselves."
Anthony Codling, analyst at Jefferies International, said that the housing measures announced were supportive of home ownership, but did not tackle the housing shortage and "will do little to help those in real need".
"It will be helpful if the government follows up its rhetoric and activates powers to speed up planning," he said. "Housebuilders regularly report that they are active on all sites with implementable planning permission, so if we can activate more sites, more homes will be built."
The OBR estimated that the policy will reduce the tax take by a total £3.16bn by 2023, however, it said the uncertainty of its forecast was high.
Hammond also announced a review of landbanking, saying that there was an unacceptable gap between the number of planning permissions granted and the number of housing starts.
Housebuilder shares were rocked by the announcement, but recovered slightly after the announcement on stamp duty. At time of writing, Persimmon, Taylor Wimpey and Berkeley Group's share prices were down by 1.5 per cent, 1.2 per cent and 2.6 per cent respectively.
"Oh dear, another landbanking inquisition," Codling said.
"Once again, history has taught us that history teaches us nothing. A new team and a new inquisition into landbanking. Every previous inquisition has found that landbanking is a myth, and we suspect that this one will too; we suspect that will be confirmed in the Spring Statement in 2018."