The chancellor Gordon Brown announced that the stamp duty threshold had been doubled to £120,000 in yesterday's Budget, providing welcome relief for many homebuyers.
The decision marks the first change in the threshold since it was set at £60,000 in 1993. Since that year UK property prices have more than doubled.
"First-time buyers will be pleased that they will have a little extra cash in their pockets at a time when usually money is short," said Milan Khatri, chief economist at the Royal Institute of Chartered Surveyors (RICS).
He pointed out that the hike in the threshold would not be enough on its own to improve the situation for first-time buyers, however.
"Today's change will help in the region of 300,000 homebuyers and offers hope to many more first time buyers," commented Peter Bolton King, chief executive of the National Association of Estate Agents.
Mr King added: "But it can only be seen as a first step in the right direction and will prove to be irrelevant to those trying to buy in London or the south east."
Homebuyers will certainly see regional differences in house prices reflected in whether the increased threshold may benefit them.
BBC News reports that where fewer than one in 25 properties sold in London in 2004 cost less than £120,000, two-thirds of those sold in the north east of England fell below the threshold.Click here to find out about mortgages.
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