LABOUR plans to slash stamp duty to zero for first-time buyers could lead to higher demand for non-existent homes, housing campaigners cautioned yesterday.

Ed Miliband yesterday unveiled the plan that will apply to homes worth up to £300,000 — representing a saving of up to £5,000.

The Labour leader said he would also give first-time buyers who have lived in an area for more than three years priority access on up to half of new homes built.

And he promised to stop foreign buyers snapping up properties by ensuring they are advertised in local areas, increasing taxes paid by those abroad and council tax for empty homes.

National Housing Federation head David Orr said that in order to end the housing crisis within a generation we need a strategic long-term plan that addresses all parts of the housing market.

He said: “We have concerns that slashing stamp duty could lead to even higher demand on homes for first-time buyers, pushing up prices even further out of reach, while not addressing the supply of homes we so desperately need.”