Stamp duty should be paid by house sellers rather than buyers, removing the tax burden entirely for the younger generations struggling to get on the property ladder, it has been suggested.
Yorkshire Building Society argued that switching the burden of the tax from buyers to sellers would save the average first-time buyer £3,791, with Londoners saving the most at £13,171 typically.
Based on putting away £250 per month, this equates to the average first time buyer avoiding 15 months of saving, or four years and four months in London.
It would help more than 225,000 people getting on the housing ladder every year, the Society argued. A total of 225,200 first-time buyers paid stamp duty between June 2015 and June 2016, having purchased a home above the £125,000 minimum threshold.
Stamp duty was reformed in 2014, making the tax cheaper for the majority of buyers liable to pay it. The tax applies in England, Wales and Northern Ireland. In Scotland, stamp duty was abolished in 2015 and replaced with the land and buildings transaction tax.
The amount of stamp duty a buyer pays depends on how expensive the property is. Yorkshire argued that by switching the tax burden to sellers, such a reform would mean that those who have already benefited from sharp increases in house prices in recent decades would bear more of a responsibility for paying stamp duty, rather than those moving up the property ladder who have not seen such a benefit.
Andrew McPhillips, chief economist at Yorkshire Building Society, said: "More than 200,000 first-time buyers paid stamp duty last year and removing this tax burden from them would give the younger generation a major leg up the property ladder. This would be felt most of all in London where on average our members pay a staggering £13,171 in stamp duty for a first home.
"The benefits would not only be felt by those looking to get on the property ladder as anyone moving up it would be better off too.
"The Prime Minister has pledged to make intergenerational support a key measure of her Government's housing agenda and this measure could achieve exactly that."
Last week, a survey from comparethemarket.com found nearly one in three homeowners who are not planning to move would be more likely to do so if stamp duty costs were cut further.
And earlier this week, think-tank the Intergenerational Foundation warned the housing crisis is driving a "geographic wedge" between the older and younger generations.
Those behind that report said a rise in "age segregation" amid a lack of suitable and affordable homes has been hugely damaging to society, weakening the bond between different age groups.
Earlier this year Yorkshire Building Society published research among more than 2,000 people aged 18 to 40, which showed 69% felt owning their home was essential to feeling they had succeeded in life.
But 49% of non-home owners aged 35 to 40 who still wanted to buy a home thought it was "unlikely" or "very unlikely" they ever would.