Britain's biggest mortgage lender has called for the inheritance tax (IHT) threshold to be hiked to 430,000 pounds, after it found 10 percent of homeowners now fall into the net.

Halifax said that figure would be the level of the threshold more than 50 percent higher than the current 285,000 pounds if it had been increased in line with house price inflation over the past decade.

Only 2 percent of English towns have an average house price above that figure.

However, the average property in one in 10 English towns is now worth more than the IHT threshold, which has failed to rise in line with house prices.

House prices have surged 179 percent in the past 10 years, but the IHT nil rate band has increased by just 85 percent.

Tim Crawford, an economist at Halifax, said: The potential reach of inheritance tax is growing more and more homes are now valued above the threshold.

He called on the government to raise the threshold to 430,000 pounds and commit to linking the threshold to house price inflation in the future.

Doing so would allow for the significant increase in property prices over the past decade, said Crawford.

It would also ensure that many middle income homeowners avoid a tax which was never intended that they pay in the first instance.

Halifax estimates that 9 percent or 1.4 million English properties are now valued at more than the 2006/07 threshold of 285,000 pounds. Inheritance tax is charged at 40 percent on the value of estates over that.

The number of homeowners set to be hit with the death duty is 2 1/2 times more than five years ago when only 4 percent of towns had an average house price above the threshold, then 242,000 pounds.

The vast majority of towns with an average property price above the nil rate band 46 out of 48 are in the south of England, according to the Halifax data. The other two are Wilmslow in Cheshire and Ilkley in West Yorkshire.

Halifax projects that the number of English properties potentially liable for IHT will more than double to 20 percent or 3.5 million properties by 2020 if the threshold is only increased in line with retail price inflation.

In some 90 towns the average house price is now within 20 percent of the current IHT threshold, and a further 145 towns command an average property price within a third of the threshold.

In London, 41 percent of boroughs have an average house price above the current threshold the highest proportion of any region. That compares to just 22 percent five years ago.

Those with the highest proportion of sales above the IHT threshold are Kensington & Chelsea (84 percent), Westminster (72 percent) and Camden (66 percent).

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