FIRST TIME buyers are set to save hundreds of pounds after it emerged that stamp duty for them may be axed by a Labour government in a bid to help more people on to the property ladder.

However, one property expert based in Dundee said that this might have a detrimental effect and further increase house prices as a result of buyers not having to allow for the 1% charge.

Labour has made the proposal ahead of its next election manifesto and Cabinet minister Tessa Jowell said the party wanted to provide more help for people trying to get a foot on the property ladder.

Stamp duty, which requires buyers to pay 1% to the Treasury on homes worth between £60,000 and £250,000, is due to be reformed under proposals by Labour, which will include an exemption for first-time buyers.

Tayside recorded the second highest house price rises in the whole of the UK over the past year, with prices rising by 43%.

The average Tayside home, which cost £89,348 a year ago, will now set the house buyer back £128,049.

Morton Simpson, director of property services with Blackadders, welcomed anything that will allow more first-time buyers to step on to the property ladder. “The stamp duty is only 1% of £60,000 so it won’t make a huge difference, but anything that is going to help first-time buyers on to the property ladder is welcome,” he said.

“However, it may also push house prices up and have a detrimental effect rather than a positive one.

“The property market, not only in Dundee but throughout Tayside, is so buoyant. There is a lack of affordable housing and one of the ways they can do that is release more planning consents on cheaper homes.”

A scheme that operated a number of years ago which offered grants to developers to build homes solely for first-time buyers is the way forward to enable people to buy their first home and avoid being priced out of the market, he said.

“At that time it was a bit of a pain for us (solicitors) but there is a need for something like this now.

“The houses were fixed price and allowed first- time buyers to get on the property ladder, and we need first-time buyers in the market.”