Regions where average first-time buyers pay*

West Midlands East Anglia South West South East Greater London Northern Ireland *London was only region in 1993. Source: Halifax

The Council of Mortgage Lenders (CML) said that failure to do so meant more than 60% of first-time buyers paid stamp duty in the last quarter of 2001, compared to 23% in the second quarter of 1997.

Over the last five years, stamp duty, which is paid on house purchases above �60,000, has increased four times.

In the year to April 2001, it generated �2.2bn in government revenue, compared to only �675m in 1996/1997 - a three-fold increase.

Current stamp duty levels

Up to �60,000 nil �60,001 to �250,000 1% �250,001 to �500,000 3% More than �500,000 4%

The Halifax bank has also joined the CML in a call to raise the �60,000 threshold at which stamp duty is paid on house purchases.

Halifax said that failure to raise the threshold had meant that a typical first-time buyer now paid duty in six of the UK's 12 economic regions compared to only one - London - in 1993.

Millions liable

According to the Halifax, the average first-time buyer in 2001 paid �78,111 to buy their home compared to �45,249 in 1993.

Recent stamp duty changes

July 1997: Increased to 1.5% on between �250,000 and �500,000. �500,000 + increased to 2% March 1998: 2% on properties between �250,000 and �500,000. �500,000 + increased to 3% March 1999: Increased to 2.5% on properties between �250,000 and �500,000. �500,000 + increased to 3.5% March 2000: Increased to 3% on properties between �250,000 and �500,000. �500,000 + increased to 4% Source: HM Treasury

Based on the current stamp duty regime, a first-time buyer now pays �781 in duty to the government.

In 1993, for example, the typical first-time buyer paid no stamp duty because the average price was well below the �60,000 threshold.

Peter Williams, the CML's deputy director general, called on the government to reform stamp duty in the budget.

"Homeowners are making a growing contribution to government revenue because of the failure to increase tax allowances," he said.

"Since 1997, the number of homes that would be liable for stamp duty has grown by millions."

Stimulate and control

Stamp duty has traditionally been seen as one way of controlling or stimulating the housing market.

For example, there was a 'stamp duty holiday' between December 1991 and August 1992 when the market was low.

As the market started improving, minor increases in stamp duty were introduced in 1992 and 1993.

But there were no significant increases until the Labour party took office in 1997.

Since then there have been four increases - and it is an increasingly lucrative source of revenue for the Exchequer.

The Labour government also abolished mortgage tax relief (Miras) in April 2000.

The CML now wants the government to act, and wants it to increase the stamp duty threshold from �60,000 to �85,400.

"The forthcoming Budget provides an important opportunity for the government to reform the way stamp duty is levied, in order to lessen its impact on the housing market," said Peter Williams.