(Adds details, quotes)
By Costas Pitas
LONDON, Nov 22 (Reuters) - British Prime Minister Theresa May’s government is to cut stamp duty property tax for first-time buyers in what is being widely seen as a bid to win over younger people struggling to get onto the property ladder who shunned the ruling Conservatives in an election earlier this year.
A lack of affordable housing has forced many younger people to live at home for longer with their parents, rent well into their 30s or buy properties further away from their place of work, pushing the issue to the top of the political agenda.
May is anxious to show her government is meeting the needs of those in their 20s and 30s, who largely backed the opposition Labour Party in the June election, depriving her of a majority in parliament.
A buyer will save up to 5,000 pounds ($6,625) on a new home due to the change in stamp duty, paid on the purchase of a property, which comes into effect immediately.
“When we say we will revive the home-owning dream in Britain we mean it,” said finance minister Philip Hammond during his annual budget statement on Wednesday.
“We do not underestimate the scale of the challenge but today we have made a substantial down-payment.”
Stamp duty will be abolished for all first-time purchases of homes up to 300,000 pounds and on the first 300,000 pounds of the price of homes up to 500,000 pounds, a move which will help 1 million people over the next five years.
The average house price in London is nearly 500,000 pounds, around 15 times the average London salary, according to official data, making many areas of the capital unaffordable to young people.
Hammond also unveiled plans to commit 44 billion pounds to boost housebuilding to 300,000 homes per year, far higher than the 217,350 new homes currently coming onto the market.
Local councils will also have the power to double an annual charge paid by homeowners who leave their properties empty, a move which could hit foreign buyers. (Editing by Stephen Addison)