More homes 'face inheritance tax'

Property prices have risen sharply in recent years

More than two million homes are now worth more than £300,000 - more than the level at which inheritance tax (IHT) is levied - a report says.

The study from the Halifax found that in 236 postcode areas, mainly in London and south-east England, the average house price now tops £300,000.

It said if trends continue, 4.3 million homes will be worth more than the IHT threshold by 2020.

The Treasury said that just 6% of estates were subject to IHT at present.

Property prices are rising faster than the level of IHT, the Halifax added.

Since 2001 the number of postcode areas where the average property price is above that level has more than doubled.

'Raise levels'

"The potential reach of inheritance tax is extending year-by-year across the country," said group economist at the Halifax, Tim Crawford.

"There has been a doubling in the number of postcodes where the average house prices is now above the threshold in the past five years," Mr Crawford added.

He called on the government to commit to raising the level of IH.

The IHT threshold is set to rise from £300,000 to £325,000 by April 2009 and then again to £350,000 by 2010.