UK's Labour woos young voters with pledge to cut home buyers' tax

(Changes date, updates after speech, adds reaction)

By William James

LONDON, April 27 (Reuters) - Britain's Labour Party pledged to scrap property purchase taxes for first-time home buyers on Monday, the party's latest effort ahead of a May 7 election to win the support of young voters who say they have been disenfranchised by high house prices.

With less than two weeks to go before the national election, most opinion polls have shown voters fairly evenly split between Britain's two main political parties: centre-left Labour and Prime Minster David Cameron's centre-right Conservatives.

Labour leader Ed Miliband set out the proposal to eliminate stamp duty for first-time buyers of homes worth up to 300,000 pounds ($455,340) - a pledge which would save those buyers as much as 5,000 pounds.

"There's nothing more British than the dream of home ownership, but for so many young people today that dream is fading," Miliband said, announcing the policy in a campaign speech in northern England.

The proposals are aimed at younger voters, many of whom cannot afford to buy property because of historically high house prices - a trend caused in large part by a shortage of new homes.

Labour promises to oversee the building of at least 200,000 homes a year by 2020.

But, Labour's plans were only "tinkering" with demand for houses without setting out a detailed plan to increase supply, said Jeremy Blackburn, Head (Other OTC: HEDYY - news) of Policy at the Royal Institution of Chartered Surveyors.

"Prices are already predicted to rise in the next Parliament and this is only likely to make matters worse," he said.

The Conservatives, who last year changed the way stamp duty is levied to lower the bill for almost all home buyers, said Labour's announcement was "panicky" and unfunded, estimating it would cost over 500 million pounds.

Miliband said he would give buyers who have lived in an area for more than three years "first call", or the preferential right, to buy up to half of new homes built locally.

Labour also proposed to stop foreign buyers from buying properties before local buyers get a chance to look at them by ensuring they are advertised in local areas, increasing taxes paid by foreign buyers and levying council tax for empty homes.

On Sunday, Labour said it would introduce rent controls if it wins the election and ban private landlords from raising rents above the rate of inflation for the duration of new three-year contracts. ($1 = 0.6588 pounds) (Additional reporting by Shivam Srivastava in Bengaluru; Editing by Peter Graff)