One of the most influential figures in the housebuilding industry is calling on the Government to bring back the Miras tax relief scheme to help overstretched first-time buyers.

The proposal is accompanied by a call for tax relief for parents who stump up cash to help their children to move on to the property ladder.

These are the most radical recommendations in a ten-point plan to help young buyers that David Pretty, a director of the Home Builders Federation and the newly installed chairman of the New Homes Marketing Board, will present to Gordon Brown next week.

Mr Pretty, who retired in December as chief executive of Barratt Developments, told The Times that the reintroduction of mortgage tax relief at source (Miras) “must only happen once there is clear evidence that the supply of new homes is increasing”.

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Seven of the ten recommendations seen by The Times are aimed at boosting the numbers of new homes being built each year in England. These range from the sell-off of government land at a discount that can be passed on to first-time buyers and key workers, to fast-track-ing planning applications for affordable housing.

Another recommendation is a call to scrap stamp duty for first-time buyers.

Speaking to The Times, Mr Pretty said: “First-time buyers are the new poor. They are having the worst time in living memory. There are a large number of well-educated, hard-working young people who are being consigned to renting.”

Experts are concerned that house prices will continue to grow as long-term housing supply continues to fall farther behind buyer demand.

Fionnuala Earley, chief economist at the Nationwide building society, said: “Affordability is an issue for first-time buyers and across the market, but you have to think hard about what you are doing with what is effectively a subsidy. That gives more money to play with and could fuel demand, which in turn could force prices up.”

Buy-to-let investors are still able to offset their mortgage interest against income, thus reducing their net tax. This is prompting concern that property speculators are buying up new homes, pushing up house prices and squeezing new owner-occupiers out of the market.

First-time buyers are, on average, borrowing 5.1 times their earnings to buy a home, according to Nationwide.

How it worked

Miras stands for mortgage interest relief at source

Introduced by the Tories in 1983, it replaced a system by which borrowers paid the interest repayments on their home loans and then claimed the tax back. Home owners saw an immediate reduction in their monthly repayments

At its peak, nearly 11 million home loans qualified for Miras relief

In 1991 Miras was set at the basic rate of tax

After 1997, the Labour government reduced Miras to a 10 per cent rate of tax, before abolishing it in 2001.

Source: Times database