By Matthew Legg

Last updated 11:45, Thursday, 07 August 2008

GOVERNMENT plans to freeze stamp duty to kickstart the housing market would actually damage it, according to a Carlisle builder.

Wayne McKnight: ’In the short term it will make things worse – they’ve just thrown another spanner in the works’

Chancellor Alistair Darling is reportedly considering axing the tax for a time to help first-time buyers and people struggling to sell their property.

The most likely change would be a deferral of the one per cent duty charged on properties of £125,000 to £250,000.

But Wayne McKnight, of McKnight and Son Builders, said the plan would not help most first-time buyers in Cumbria and would damage the market in the short term.

“It’s still not going to help first time buyers here, because they are generally buying houses below the £125,000 threshold anyway,” he told the News & Star.

“They are talking about bringing it in the autumn, but that will mean people who are considering selling now will hold off until then, slowing the market down even further.

“In the short term it will make things worse – they’ve just thrown another spanner in the works.”

Mr Darling has committed the Government to announcing “further measures in the autumn to help people with housing”.

The Chancellor did not rule out changes to stamp duty, but added: “We have not concluded what exactly we need to do.”

Prime Minister Gordon Brown is thought to be keen on the idea as a way of salvaging his own battered reputation.

But observers believe the Government can ill afford to lose the £6.5bn annual revenue generated from residential stamp duty.

Stamp duty was first levied in the UK in 1694 to pay for the war with France.

Although initially only planned for four years, it proved such a good earner for the government that it was never repealed.