But there is bad news for existing mortgage borrowers. From 6 April next year, mortgage interest relief is to be restricted to 20 per cent rather than 25 per cent.
The change in stamp duty, which applies from today providing the sale document is not stamped until 23 March, is aimed at first-time buyers. It benefits cheaper properties, as stamp duty is payable at 1 per cent on the full purchase price of a property once it breaches the pounds 60,000 limit.
According to Halifax building society the average price paid by first-time purchasers is below pounds 60,000 in every region of the UK apart from London, where the average price is pounds 66,000.
The reduction in Miras could cost borrowers up to pounds 10 a month, however. Inland Revenue figures show 3.9 million borrowers, 40 per cent of the total, have mortgages of pounds 30,000 or more. For those with smaller mortgages the tax increase will be less.
The cut will save the Treasury about pounds 900m on next year's expected pounds 4.5bn Miras bill. The Chancellor said it was interest rates, not the tax relief, that were the most important factor in the cost of a mortgage. These had fallen sharply, with repayments on the average mortgage cut by more than pounds 150 a month since October 1990, he said.
Nevertheless, because of the 'fragile' state of the housing market he said he intended delaying the change until next year.
The elderly, with life annuity home income plans, will continue to attract 25 per cent relief.Reuse content