It is expected to help more than a million first-time buyers get onto the housing ladder in the next five years.

The cut will be for all stamp duty for first-time buyers for properties up to £300,000. It will also apply to the first £300,000 for properties worth up to £500,000 purchased by first-time buyers.

Delivering the Budget he said this would bring “a stamp duty cut for 95% of all first-time buyers who pay stamp duty. And no stamp duty at all for 80% of first-time buyers from today.”

According to HM Treasury, as a result of these changes:

• in every region of England outside London, and in Wales and Northern Ireland, the average first-time buyer property will pay no stamp duty;
• the stamp duty bill of the average first-time buyer in London will nearly halve, from £10,500 to £5,500.

It will cost £125m this year, and is expected to total £3.2bn by the end of 2022/23.

Mark Hayward, chief executive, NAEA Propertymark, said the move will have a positive impact on the market.

“It’s a smart move to ensure the dream of homeownership for young people can become a reality and will help buyers across the UK, including London and the South East where property prices are higher.

“We do however need to realise that this move will increase the demand for FTB properties and if we don’t have the supply it will push prices up. We have seen this in areas where Help to Buy is offered, as it attracts a great deal of interest from FTBs.”

The cut had been well trailed over the last month with the expectation that the Chancellor would look to make homeownership easier for first-time buyers in a bid to target younger voters.

However, experts from the London School of Economics suggested stamp duty cuts targeted at older homeowners could have a more far-reaching impact on the housing market.

Last month it was revealed that the increases to stamp duty had resulted in a £2bn increase in tax revenue during the three months to October.