Tory plan to scrap first-time stamp duty

First-time buyers may be exempted from stamp duty if they pay less than £250,000 for their first home, shadow chancellor Oliver Letwin has suggested.

It is one of several options on which the Tories are consulting to make the duty fairer for house buyers.

Mr Letwin said that as recently as 1997, the average first-time buyer paid no stamp duty at all on their house purchase but huge property price rises since then mean they now have to pay an average of ?1,170, or in London, an extra £8,000 on top of the house price.

A second option, which would also relieve many of the duty, is to double the threshold at which the duty becomes payable - from ?60,000 to ?120,000.

This would remove most first-time buyers from the duty in many parts of the country, but not in London and the South-East, where the average first-time purchase is about £160,000.

The amount of money raised from stamp duty on residential property since 1997 has risen from £675 million to £3.79 billion.