Philip Hammond dramatically abolished stamp duty for first time buyers on homes worth up to £300,000 today as part of a big Budget package to tackle the housing crisis.
The radical move to help young people struggling to get on the property ladder will also apply to homes worth up to half a million pounds in 'high value' areas - meaning 95 per cent of first-time buyers will see a cut in the amount they pay and 80 per cent will pay nothing.
But the independent OBR watchdog warned that the main gainers from the stamp duty break would actually be existing homeowners - as it would drive prices up.
The bold offer to Millennials came after Mr Hammond vowed to spend an extra £3billion preparing Britain for Brexit - but had to admit that growth forecasts had been slashed.Unveiling the crucial package in the Commons, the Chancellor signalled a loosening of the purse-strings after years of austerity, and called for a huge effort to create 'an outward-looking free-trading nation', saying he wants to harness the 'opportunities' of Brexit.
Some £2.8billion more is being pumped into the NHS, with £340million available immediately – but the figure is lower than had been asked for. Another £1.5billion has been earmarked to head off anger over the new Universal Credit benefit - cutting the waiting time for getting the handouts to five weeks.
But he also revealed that the OBR had dramatically slashed growth estimates for the coming years - including from 2 per cent to 1.5 per cent this year.
Eurosceptic MPs were cheered that Mr Hammond immediately took a more upbeat approach on the UK's future outside the EU, after he came under heavy fire for an 'Eyeore' attitude. In his most optimistic remarks for months, Mr Hammond said the UK would 'run towards the future' of Brexit.
'While we work to achieve this deep and special partnership… …we are determined to ensure that the country is prepared for every possible outcome,' he said.
'We have already invested almost £700m in Brexit preparations and today I am setting aside over the next two years another £3bn and I stand ready to allocate further sums if and when needed.
'No one should doubt our resolve.'
Among the announcements in Mr Hammond's crucial second Budget were:
A gaffe-ridden package could spell disaster for Mrs May's government, which is reeling from sex harassment scandals, Cabinet resignations and the threat of defeat on the Brexit Bill.
Mr Hammond admitted at the weekend that his ambitions for this afternoon did not stretch beyond presenting a 'balanced' Budget. Downing Street was so concerned about the lacklustre details briefed to journalists overnight that it stepped in to insist more information about education announcements were released.
Mrs May tried to downplay the tensions this morning by tweeting a supportive message with a picture saying Mr Hammond would be setting out the government's blueprint for the future.
But the Chancellor has little room for manoeuvre on the government's finances as the economy has slowed down, while productivity gains have stayed stubbornly low.
In his speech, Mr Hammond said that 'for the first time in decades, Britain is genuinely at the forefront of a technological revolution, not just in our universities and research institutes, but this time in the commercial development labs of our great companies and on the factory floors and business parks across the land'.
Mr Hammond said he had previously set aside £26billion as a Brexit warchest, adding: 'Now I choose to use some of the headroom I established then so that as well as reducing debt, we can also invest in Britain's future, support our key public services, keep taxes low, and provide a little help to families and businesses under pressure.
'A balanced approach, that will prepare Britain for the future, not seek to hide from it.'
Mr Hammond said the tight economic landscape would not stop him being bold about Brexit and pledged to use some of the money.
'An economy that continues to grow, continues to create jobs than ever before and continues to confound those who seek to talk it down. An economy set on a path to a new relationship with our European neighbours and a new future outside the EU,' he said.
'A future full of change, new challenges and above all full of new opportunities.
'And in this Budget, we express our resolve to look forwards not backwards. To embrace that change to meet those challenges head on…and to seize those opportunities for Britain.
'The negotiations on our future relationship with the EU are in a critical phase. The Prime Minister has been clear that we seek a deep and special partnership, based on free and frictionless trade in goods and services…close collaboration on security.'
Setting out the cash for the NHS, Mr Hammond said he recognised that services were 'under pressure right now'.
'I am therefore exceptionally, and outside the Spending Review process, making an additional commitment of resource funding of £2.8billion to the NHS in England - £350million immediately to allow trusts to plan for this winter and £1.6billion in 2018-19, with the balance in 2019-20, taking the extra resource into the NHS next year to £3.75 billion in total.'
The Chancellor said fixing the housing market was a 'crucial part' of ensuring the younger generation are not the first since the Black Death to be less prosperous than their parents.
He promised the Government would do 'whatever it takes' to get homes built including cracking down on 'land-banking' and underwriting loans to small house builders if necessary.
There will be direct state intervention, including a programme of buying land.
In all Mr Hammond is expected to announce measures worth £5billion to kick start more house building and get younger people on the housing ladder with cuts to stamp duty for first-time buyers.
But his plans fall far short of Local Communities Secretary Sajid Javid's call to borrow £50bn to fund a massive house building programme.
Official figures this week showed more than 217,000 homes were built last year - nearly a third less than Mr Hammond's new target.
Mr Hammond bowed to pressure from motorists not to slap additional tax on petrol and diesel in the Budget.
Campaign group FairFuelUK said that more than 30,000 supporters had emailed the Chancellor over 48 hours with a plea for him not to hit families and businesses who are 'struggling to make ends meet' in order to win green credentials for his Budget.
He announced a £180million investment in maths teaching, arguing that better workplace maths skills are essential to ensure the UK 'remains a competitive force in the global marketplace'. Schools and colleges will receive an additional £600 for every extra pupil studying maths A-level, allowing them to invest in better provision.
Teachers in underperforming schools will be offered training grants worth up to £1,000 each to improve their skills.
Mr Hammond set aside more than £80million to train an extra 8,000 computer science teachers.
He made clear his determination to pitch for Millennial votes by announcing plans to get 300,000 homes built a year.
Mr Hammond is regarded as on a final warning after his first Budget package in March unravelled within days over a proposed hike to national insurance contributions for more than 2.4million self-employed.
The Chancellor initially seemed unaware that the plan smashed a Tory manifesto pledge - and amid a massive backlash Mrs May humiliatingly forced him to drop it.
He has also enraged Brexiteers with gloomy pronouncements on Britain's future outside the EU, with some openly demanding Mrs May replace him with a more optimistic figure.
There had been strong signs that Mr Hammond was destined for the chop after the election. But Mrs May's poor showing left her too weak to make dramatic changes to her top team.
The Chancellor has again been tipped for the sack in a new year reshuffle if this week's Budget is a flop.
Jeremy Corbyn predicted the package would unravel within days, warning 'misery' will continue for people across the country.
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