Hammond delivers make or break Budget for Brexit

Hammond delivers make or break Budget for Brexit.

Philip Hammond dramatically abolished stamp duty for first time buyers on homes worth up to £300,000 today as part of a big Budget package to tackle the housing crisis.

The radical move to help young people struggling to get on the property ladder will also apply to homes worth up to half a million pounds in 'high value' areas - meaning 95 per cent of first-time buyers will see a cut in the amount they pay and 80 per cent will pay nothing.

First time buyers purchasing an average property will benefit to the tune of £1,660, while some will be £5,000 better off, according to the Treasury. 

Mr Hammond said the cut - which will come into force immediately - would be teamed with a wider £44billion push to build 300,000 extra new homes a year by the mid 2020s, including in five new 'garden towns', and should 'revive the home-owning dream'.

But the independent OBR watchdog warned that the main gainers from the stamp duty break would actually be existing homeowners - as it would drive prices up. 

The OBR also delivered a blow to Mr Hammond by dramatically slashing growth forecasts, as he vowed to spend an extra £3billion by 2019 'harnessing the opportunities' of Brexit.

In a crucial package that could have saved his job, the Chancellor effectively signalled the end of austerity with measures that amounted to a net £25billion splurge over the next five years.

Some £2.8billion more is being pumped into the NHS in England, with £340million available immediately – but the figure is lower than had been asked for. Another £1.5billion has been earmarked to head off anger over the new Universal Credit benefit - cutting the waiting time for getting the handouts to five weeks.

Controversially, he said he would not specifically allocate extra resources for public sector pay rises - although he insisted he would heed requests for extra funding if and when health workers are awarded increases.

Among the key announcements in Mr Hammond's crucial second Budget were:

Pump billions into tackling the housing crisis, including a new target to build 300,000 homes a year and measures to make it easier for councils to build. Said the government would carry out 'direct intervention' to ensure there was land available for construction;

Wooed younger voters with a cut in stamp duty for first-time buyers, and the extension of the young person's railcard to all under-30s;

Vowed £28million to eradicate homelessness in cities by 2027 and devoted more money to addressing mental health conditions;

Allocate £2.8billion more to the NHS over the next two years, but well below the £4billion that has been requested by senior managers in the health service;  

Mr Hammond insisted public sector workers must improve their productivity in return for an easing of the 1 per cent pay cap. Mr Hammond did not allocate more money to fund pay rises, but said he was ready to if required;

Announced a 40 per cent increase in research and development spending to make the UK a world leader in areas such as driverless cars and robotics;

The Chancellor bowed to pressure not to increase fuel duty, and froze most alcohol duties apart from strong cider;

Seriously wounded troops will get £4.5million from the last of the Libor fines levied on misbehaving banks; 

The housing drive commits an additional £15.3million in capital funding for the housing market, which will be made available over the next five years in loans and guarantees - bringing the total support offered by the government to £44billion.

'House prices are increasingly out of reach for many,' Mr Hammond said. 'It takes too long to save for a deposit and rent absorb too high a portion of monthly income...

'When we say we will revive the home owning dream in Britain we mean it.' 

The Chancellor said fixing the housing market was a 'crucial part' of ensuring the younger generation were not the first since the Black Death to be less prosperous than their parents.

He promised the Government would do 'whatever it takes' to get homes built including cracking down on 'land-banking' and underwriting loans to small house builders.

There will be direct state intervention, including a programme of buying land, and local authorities will be able to charge a 100 per cent council tax premium on empty properties.

As part of a 'long term battle to achieve and sustain affordability', he said New Town Development Corporations would be used to 'kick-start' five new Garden Towns in 'areas of demand pressure'. 

Some £28million is being committed to a goal of ending homelessness in cities by 2027, Mr Hammond said.  

But his housebuilding plans fell short of Local Communities Secretary Sajid Javid's recent call to borrow £50bn to fund a massive house building programme.

The stamp duty move - which will only apply in Scotland if the government there approves it - was also called into question by the OBR.

Des