The prime minister has vastly exaggerated the amount of money needed to pay for the surprise cut in stamp duty for homebuyers, experts said yesterday.

The Treasury had claimed that the one-year stamp duty holiday on house purchases up to £175,000 – the key plank in a package of measures designed to stimulate the moribund housing market – would cost more than £600m.

But industry bodies and opposition politicians said yesterday this was likely to be more than double the true expense of the scheme. The Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors both estimated the cost to be closer to £250m.

'As with Gordon Brown’s Budgets in the past, these measures unravel the next day when you look at the small print,' said Nick Clegg, leader of the Liberal Democrats.

Financial Times