The average London home is likely to exceed the current Inheritance Tax threshold of £225,000 as it climbs to a typical price of £331,000 next year, according to new analysis.
Venture capital investor Albion Ventures claims the average home in south east England will pass the £325,000 figure by 2019 and, across the rest of UK, the average price of a home will exceed the IHT threshold by 2025.
The IHT threshold remains fixed for the sixth successive year at £325,000. However, Albion's analysis shows that house prices have increased by an average of 5.8 per cent a year across the UK since 1986 - despite two downturns during that time - and many areas of the UK have seen much higher rises over the last 12 months.
On a regional basis Albion's study uncovers significant variations.
For example the average home in south west England is forecast to cross the IHT threshold by 2023 while those in Scotland and Northern Ireland may take over 20 years to do so, waiting until 2036 and 2042 respectively.
Had IHT continued to rise in line with its historic average it would currently be £401,442 in 2013/14 rising to £423,212 in 2014/15.
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