Stamp duty threshold will fall back to £125,000 in new year

First-time buyers were dealt a blow in the pre-budget report when the chancellor announced that the current stamp duty holiday would not be extended beyond the end of the year.

Alistair Darling also scrapped plans to raise the threshold for inheritance tax from £325,000 to £350,000. Currently, anyone buying a property for £175,000 or less avoids paying one per cent stamp duty.

This threshold has been in place since September 2008 when the chancellor increased it from £125,000.

Since the stamp duty holiday was introduced, about 132,500 house-purchase mortgage transactions have escaped the tax, according to research by the Council of Mortgage Lenders.

This accounts for more than a quarter of the 486,400 house purchase loans in the period.