Gordon's slammed on stamp duty cut

The year-long tax "holiday" is worth up to £1,750 but only for buyers of homes worth between £125,000 and £175,000.

Industry experts called it a "drop in the ocean" and a "political sticking plaster" because it did nothing to address the real problem of a mortgage famine.

London will gain the least, despite suffering some of the worst problems, because just eight per cent of homes on sale in the capital cost less than £175,000. Mr Brown went to Ealing to publicise the measure but Tory researchers revealed that out of all the homes for sale in the borough, just nine flats and no family houses would be eligible.

The stamp duty move was one of several measures designed to help homeowners. Many experts said they were steps in the right direction but some were derisory about the chances of the plan reviving the stalled property market. Housing charity Shelter said 15,000 families could benefit from the overall package, worth £1.5 billion. But it said 45,000 faced being repossessed this year.

The new stamp duty threshold is just above the latest UK figure for average property prices, which stands at £164,654.

The Council of Mortgage Lenders said the move did not go far enough. Spokeswoman Sue Anderson said: "It is questionable whether it will incentivise buyers who wouldn't have entered the market anyway."

The reaction to the much-trailed housing rescue package - the first big announcement since July and a key part of Mr Brown's September relaunch - was a bitter disappointment to the Prime Minister.

He is desperate after a summer of Cabinet in-fighting, dire poll ratings and recent by-election defeats. Adding to the sense of turmoil, there were rumours that Mr Brown had tried to push Chancellor Alistair Darling into raising the stamp duty threshold to £250,000, but the Chancellor refused.

When asked to explain how it would pay the £600 million cost of the cut agreed, Mr Darling flatly refused to say where the money would come from. It was the second big tax break rushed out since the Budget in March, coming on the heels of the £2.7 billion in compensation for the scrapping of the 10p tax band.

Shadow chancellor George Osborne said: "This is a short-term survival plan for the Prime Minister, not a long-term recovery plan for the economy." To compound the gloom, a new report from the OECD predicted the UK will be in recession by the end of the year.

The lack of special help for London dismayed experts in the capital. Michael White, a property lawyer at solicitors Dawsons LLP, said few buyers would gain at all. "Take London for example, where the average property is worth around £375,000. I can't imagine the seven and a half million or so people living in the capital are going to be jumping for joy at today's announcement," he said. Mr Brown, however, said the measures showed the Government was listening to voters' concerns and taking firm action to help them through the worst of the economic slowdown. "Homeowners need to know we will do everything we can to keep the housing market moving forward," the Prime Minister said.

"Help with stamp duty, help for first-time buyers, help to build more social housing, help to take unsold properties off the housing market, and help for people who get into difficulties - these are the things that a government should do." Stamp duty rakes in £6.5billion for the Treasury - with Londoners paying by far the biggest amounts. Mr Brown visited the home of Dominic Bradley, a first-time buyer priced out of the market, who said the stamp-duty holiday would have been a help to him.

The 24-year-old, a data manager for the Royal Marsden Hospital, has bought a quarter share of his and his partner's home under a shared equity scheme run by a housing association. "On our combined wages, the lenders were prepared to lend us £170,000, and that's just not enough round here, so we thought we'd try a different scheme to become homeowners," he said.

Communities Secretary Hazel Blears stressed that the help would go to "decent families", implying that ministers are worried they will be accused of giving away taxpayers' money to undeserving cases.

Houseboat or a small flat ... what's on offer for £175,000