In today’s much anticipated mini Budget, as well as permanently doubling the stamp duty nil rate band for residential properties in England and Northern Ireland, the Chancellor also increased current thresholds for first-time buyers.

Kwasi Kwarteng said the level at which first-time buyers start paying stamp duty will rise from £300,000 to £425,000.

Further, the maximum value of a property on which first-time buyers relief can be claimed will increase from £500,000 to £625,000.

The government said the changes will cut stamp duty bills for all movers by up to £2,500, while first-time buyers will be able to save up to £11,250 in relief.

Overall, it will take 200,000 homebuyers, including 60,000 first-time buyers, out of paying any stamp duty.

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It added that around 29,000 more people will be able to move home each year, which will boost household consumption, build confidence in the economy and support businesses relying on the property market.

The government said: “This policy is a tax cut for hard-working people and will allow them to keep more of the money they earn. This tax cut will boost household consumption, increase economic confidence and support jobs.”

Paula Higgins, chief executive of property advice and campaign website, HomeOwners Alliance, said: “The Chancellor’s announcement is much needed great news for first time buyers. The government’s changes to stamp duty mean more people will be able to afford to get on the property ladder. It’s especially welcome at a time when interest rates are driving up the cost of borrowing.

“Government has also reaffirmed its commitment to homeownership today. We agree it is critical: homeownership shouldn’t be for the richest in society, but achievable for everyone. This tax cut is a step in the right direction.”

However, others have suggested the move could push up prices. Myron Jobson, senior personal finance analyst at Interactive Investor, said: “It is hoped these measures will help first-time buyers and second steppers. But the measure could create more problems than they solve. The real issue is housing inventory – there are not enough homes to meet demand.

“Last year’s stamp duty holiday has shown us how effective the measure is in stimulating demand. The cost-of-living crisis has changed the landscape and together with rising interest rates, has compounded the affordability hurdle. However, the various house price indices paint a picture of a robust housing market. Fuelling demand for homes without addressing one of the key reasons for the red-hot housing market would serve to add coals to the flame.”

The government’s decision to reform stamp duty was leaked earlier this week.

Stamp duty is a devolved matter in Scotland and Wales but the Scottish government is expected to receive more than £600m extra funding over the 2021 spending review period as a result of the changes to income tax and Stamp Duty Land Tax. The Welsh government will receive around £70m over the same period as a result of the change to Stamp Duty Land Tax.