Stamp duty will be scrapped for first-time buyers purchasing homes with a price tag of up to £250,000, the Chancellor Alistair Darling announced earlier today.
In his Budget 2010 report, Mr Darling said the change will take effect at midnight tonight and last for two years, and will be funded through the introduction of a new 5 per cent stamp duty on residential properties costing more than £1 million from April next year.
The chancellor said: "The housing market has now stabilised and has begun a slow recovery. But many first time buyers, particularly those without large deposits, still find it hard to get a mortgage . I want to help them, but do so in a way that is properly funded."
The move to double the stamp duty threshold from £125,000 to £250,000 for first-time buyers was welcomed by estate agents, mortgage lenders and housebuilders across the UK, with the Council of Mortgage Lenders claiming it will benefit nine out of 10 people buying their first home between now and 2012.
Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), called the move "a major victory for first-time buyers ".
He said: "For thousands of first-time buyers, the dream of getting on to the property ladder was slipping out of reach. This announcement has added a new rung to the property ladder, one within reach of thousands of young families."
The Royal Institution of Chartered Surveyors (RICS) said the reduction in stamp duty could help drive annual property sales pass the one million mark for the first time since 2007.
However, both the NAEA and RICS added that greater stamp duty reform was still needed.
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