Earlier this week, the Chancellor of the Exchequer, Alistair Darling, announced during his budget speech, that the threshold for stamp duty would increase to £250,000, from £125,000 for first time buyers in an attempt to encourage this sector to enter the housing and home owner loan market.

Following the announcement, the estate agent Rightmove has published research which has shown that approximately 70 per cent of all first time buyer housing transactions will be below the new stamp duty threshold.

At the previous level of just £125,000, only 25 per cent were below the threshold, making it even more expensive for a first time buyer to get onto the housing ladder, in addition to the high cost of a home owner loan or mortgage.

At the opposite end of the housing market, only around 2 per cent of all properties for sale on the market are valued above £1 million, which would attract the new rate of 5 per cent in stamp duty.

It is hoped that this news will encourage more would be first time buyers to think more seriously about buying a house and applying for a new home owner loan. A first time buyer could now potentially save up to £2,500 in stamp duty tax, money which could be well spent on adding to their deposit in order to meet lenders strict criteria on loan to value ratios.

Miles Shipside of Rightmove said “This welcome initiative removes the majority of properties from the clutches of a somewhat restrictive tax for the UK property market, giving a welcome boost to the important spring market. A massive 70 per cent of properties for sale are now tax free for first time buyers. However, sellers may feel they have to negotiate less with a buyer who is now a couple of thousand pounds better off , which could blunt the benefits of the stamp duty holiday.”