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Latest quarterly research from the Halifax shows the average price of a home in Greater London breaking through the £300,000 barrier for the first time in Q2 2007- to £313,122 - taking the average price in the capital above the new inheritance tax threshold of £300,000.
Since 1995/96 house prices across the UK have increased by 219% - more than double the 95% increase in the IHT threshold from £154,000 in 1995/96 to £300,000 for 2007/08. Indeed, the IHT threshold would now be at £490,000 - almost two-thirds above the current level of £300,000 - if it had been increased in line with house price inflation since 1995/96.
Meanwhile, the average price in the South East, the second most expensive region, rose above £250,000 for the first time in Q2 2007 to £259,904. And that takes it above the £250,000 threshold at which stamp duty is payable at 3%. As a result, someone purchasing at the average price in the region in Q2 2007 would have paid £7,797 in stamp duty; £5,302 more than a purchaser paying the region's average price (£249,471) in the previous quarter.
If the higher stamp duty thresholds were increased in line with house price inflation since July 1997 - when the £250,000 and £500,000 thresholds were introduced - the £250,000 threshold would now stand at £720,000 and the £500,000 threshold would be £1,440,000.
And if the lowest stamp duty threshold had been increased in line with house price inflation since March 1993, it would now stand at £190,000. This would be £65,000 above its current level of £125,000.
As for local property prices, 8 towns that have seen the biggest house price rises during the last 12 months are all in Northern Ireland.
Newtownards is the UK's top property hotspot, recording a 64% rise in prices over the past year - the average price there having risen from £139,610 in Q2 2006 to Q2 £228,310 2007.
Craigavon, a new town, has seen the second biggest rise in the UK with an increase of 57%, taking the average price there from £132,727 to £208,280 over the past year.
Regionally, the average price in the North passed £150,000 for the first time in Q2 2007, reaching £155,188. Scotland (£140,262) and Yorkshire & the Humber (£149,051) are now the only parts of the UK where the average price remains below £150,000.
The north/south divide in England has re-emerged over the past year. Greater London (18.4%), the South East (14.0%), East Anglia (10.9%) and South West (10.0%) have all recorded double digit house price growth since 2006 Q2. All the other English regions have seen single digit growth over the period. As a result, the difference between the average price in northern England and that in the south has widened from £81,681 in Q2 2006 to £103,451 in Q2 2007.
23 July 2007 © Moneyextra.com
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