BRITAIN’S biggest mortgage lender will pay the 1% stamp duty due on homes bought by first-time buyers, it announced this week.

The Halifax says its deal will save younger borrowers struggling to get on the housing ladder as much as £2,500. They will be returned the 1% payable on purchases between £125,001 and £250,000. The high street lender says the offer will “ease the burden” on first-time buyers taking a Halifax mortgage.

The move came as financial experts called on Chancellor George Osborne to reform the levy in this month’s Budget.

The average UK house price reached £250,000 in December, tipping tens of thousands more into 3% stamp duty.

Eddie O’Gorman, of investment specialist the Way Group, said: “Stamp duty is a punitive tax on already taxed income simply because you have moved house.”

Halifax mortgage director Craig McKinlay added: “Stamp duty can often be a cost that is overlooked, particularly by first-time buyers focused on saving an initial deposit.”