Ministers' dithering over stamp duty 'stops housing market in its tracks'

Devastating evidence of the paralysis gripping the housing market because of Labour's dithering over stamp duty can be revealed today.

Thousands of buyers are putting off their purchase until later this year in the hope of saving thousands of pounds in tax, research seen by the Daily Mail suggests.

Almost two out of three estate agents  -  62 per cent  -  said that customers have expressed doubts about going ahead, and one in four  -  25 per cent  -  said that sales have actually fallen through in recent days.

Three-quarters reported that applicants who had registered an interest in buying a property are now asking whether they should wait for a 'stamp duty holiday'.

Industry experts warned that buyers are also demanding thousands of pounds off the asking price  -  the equivalent of what they might save if the tax were suspended.

The findings will pile pressure on Alistair Darling to clarify his plans for the levy.

The Chancellor has indicated he is considering a suspension of stamp duty to help kickstart the housing market.

But experts immediately warned this could have a disastrous effect on the already fragile market, saying buyers would put their plans on holdat the prospect of saving a large sum in a few months' time.

Now a comprehensive survey for the National Association of Estate Agents, involving 1,400 of its members, has confirmed their worst fears.

It found that 92 per cent reported that consumers' concerns about the market had been increased by Mr Darling's remarks.

The number of sales reported by estate agents has fallen to an average 14.4 in the last three months

And Peter Bolton King, head of the Association, said the Treasury had turned down three of his requests for a meeting with ministers to discuss the turmoil.

'These figures show that a market which was anyway very delicate has been made even worse by this irresponsible briefing and speculation,' he said.

'We've been calling for a stamp duty holiday to be announced in the proper way, but in all honesty we'd now prefer them to come out and say they're not doing anything.'

Tory leader David Cameron yesterday accused ministers of being 'reckless' with the housing market by their failure to set out clear proposals.

'We said back in October that we would abolish stamp duty for nine out of ten first-time buyers,' he said at his monthly press conference. 'I do not know why the Government is still dithering.

Their decision to brief out the possibility of a stamp duty holiday was completely reckless. Far from bringing up the housing market, they've actually frozen it.'

The stamp duty row has heightened tensions between Downing Street and the Treasury. Treasury insiders suspect Gordon Brown's aides of briefing newspapers about the possibility of a cut  -  something Number Ten denies.