Alistair Darling?s second budget has announced that stamp duty for housing with a value of up to ?250,000 will be scrapped as from 25 March 2010, lasting for two years.
The move means that around 90 per cent of first-time buyers will not have to pay the tax of up to ?2,500. The new threshold will go ahead, partially funded by a 5 per cent increase to be introduced next April on housing valued at over ?1 million, resulting in a minimum of ?50,000 in stamp duty implemented on buyers.
The Chancellor of the Exchequer 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.?
Mr Darling added: ?I want to help them, but do so in a way that is properly funded.?
The news has been welcomed by many housing market experts. They said that the move would make the possibility of owning property a reality for many potential first-time buyers.
Although average house prices in London and the south-east are in excess of ?250,000, Nationwide and Halifax have reported that the average UK home costs just over ?160,000, so the removal of stamp duty for many homes will still benefit the consumer.
The National Association of Estate Agents (NAEA) told The Guardian: ?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.?