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A radical overhaul of stamp duty was the surprise package in yesterday's announcement, and will lead to a reduction in the duty for 98 per cent of people in the UK who pay it.

The radical shake-up means that someone buying a family home with a typical price tag of £275,000 will save £4,500 compared with the current rules, although those buying very high-end properties will see their bills increase.

Shrewsbury surveyors firm Carter Jonas said that based on October's house prices, the change would mean a saving of £885 on a typical sale in Shropshire.

The Office for Budget Responsibility (OBR), expects the overhaul to trigger a small upward creep in property prices and sales of homes worth up to the £937,500 tipping point, and a small decrease in prices and activity above this level.

Campaigners have been pressing the Government to change the system as rising house prices have pushed more and more home buyers into higher stamp duty brackets, ramping up the up-front cost of getting on the property ladder or moving house.

Under the new system, instead of paying tax at a single rate on the entire property price, buyers will only pay tax on the part of the property price that falls within each tax band, in a similar way to the way that income tax is calculated.

Properties worth up to £125,000 will still fall below the stamp duty threshold.

From today properties will attract a two per cent rate on values between £125,001 to £250,000, a five per cent rate between £250,001 and £925,000, a 10 per cent rate between £925,001 and £1.5 million, while values of £1,500,001 and over will attract a 12 per cent rate.

The changes mean that instead of paying £8,250 in duty on an averagely-priced UK family home worth £275,000, someone will instead see their tax bill more than halved to £3,750.

Stamp duty change was one of a raft of measures announced by the Chancellor, despite him having little cash to play with.

The Chancellor cheered British industry by announcing a review of business rates under moves to boost the economy and create jobs, as well as extending a programme of rate relief for small businesses for another year.

Families flying off on holiday will benefit from the Chancellor's decision to scrap the Air Passenger Duty airport departure tax for children under 12 year of age from May 1 2015.

The Government will also introduce student loans worth up to £10,000 for postgraduates for the first time, Mr Osborne added.

In his response Shadow chancellor Ed Balls said working people are still facing a cost-of-living crisis despite the economic news and policies announced in the Autumn Statement.

He said the Office for Budget Responsibility's new figures show again that wage growth is weaker than expected, which is in turn hitting tax revenues.

Mr Balls said wages have not kept up with prices in every month but one over the last four and a half years, leading to a squeeze on living standards.

The Labour frontbencher added: "Working people are now £1,600 a year worse off than they were in 2010. Someone in full-time work is now £2,000 a year worse off."

Charities expressed concern at the announcement of a decision to freeze Universal Credit work allowances as part of a raft of welfare announcements.

Barnardo's chief executive Javed Khan said: "Barnardo's is deeply concerned that Government plans to further freeze working benefits, leaving poor children out in the cold. Struggling families are already telling us they are having to choose between heating and eating, as cuts have left them unable to pay electricity bills."

And Paul Kenny, general secretary of the GMB union, was critical of the performance of the UK economy.

He said: "The real value of take-home pay for workers is 13 per cent below pre-recession levels while many of the new jobs are precarious and badly paid. If this is success, I would not like to think what failure looks like."