'New millionaires' of the house-price boom

The number of millionaire households in Britain has almost doubled in the past three years, thanks to the soaring property market.

There are about 425,000 families owning assets worth more than £1million, according to an estimate published today.

The total compares with the figure of 230,000 calculated by the Inland Revenue in 2001.

The new millionaires are concentrated mainly in London and the South-East. In the capital, as many as one owner in 20 is now " technically" a millionaire, based on property value and other assets less borrowings such as a mortgage.

The latest estimates will fuel fears that Gordon Brown is planning a tax raid on the inflated value of property in the South-East to boost Treasury coffers.

Last week, a think-tank with close links to Downing Street suggested that the Chancellor should slap a 50 per cent inheritance tax on estates worth more than £763,000.

This could saddle children of property owners with death duties running to hundreds of thousands of pounds. Forecasting group the Centre for Economics and Business Research (CEBR), which compiled the new figures, says about 175,000 millionaire householders live in London with a further 90,000 across the South-East. They account for more than 60 per cent of the UK total.

The huge expansion in the ranks of the once exclusive millionaires' club has been fuelled by the explosive growth in property breaking through the £1 million mark. In many London neighbourhoods, it is now hard to find houses below the magic seven-figure barrier.

Although the £1 million house is now a feature across Britain, such households are far scarcer outside the South-East. There are 32,000 in the South-West, 29,000 in the East, 23,000 in the West Midlands, 20,000 in the North and 15,000 in the East Midlands.

Scotland, Wales, the North-East and Northern Ireland prop up the bottom of the league table - only 4,000 are located in Ulster.

The CEBR warned that the sharp rise in household wealth should not be used by the Government to raise more tax revenue.

Apart from raising inheritance tax rates, it said one of the options was to raise the rate of stamp duty from four per cent on properties-above £500,000. But this was likely to be unpopular, as was imposing capital gains tax on the sale of the family home.

Douglas McWilliams, chief executive of CEBR, said this would be unfair as it would primarily be levied on people in the South.

He added that with the abolition of mortgage interest relief, people had already paid for their houses with post-tax income and should not be taxed a second time.

With property lowering the £1 million bar, a far more exclusive club comprises those who earn at least £1 million a year - about 6,000 in Britain.