The UK stamp duty for first-time buyers of homes up to £250,000 (US$372,310) was scrapped in the last budget before the election in a direct appeal to younger voters struggling to step on to the housing ladder.
The government will from Thursday double the stamp duty limit for first-time buyers from £125,000 to £250,000 for this year and next. This is set to help about 90% of such house buyers and provide a welcome boost to still stagnant activity in the UK housing market.
The move, which will be funded through a stamp duty increase to 5% for homes of more than £1m, was welcomed by the housing market, sending share prices of big builders higher in early afternoon trading.
Alistair Darling, chancellor, added that the housing market had now stabilized and has begun a slow recovery, although recent data, showing two months of house price falls, has suggested that this rebound has started to falter.