The annual cost of a band D council tax property in Barnet in 2024-25 is 3.3 times as big as it was in 1995-96 reports Andrew Dowdeswell, Data Reporter

A view across mix of low rise housing with new build terraced housing in the foreground — House prices have outpaced council tax by 78% – (Credit – Radar)

People in Barnet are benefitting from the “absurd” council tax system, figures suggest.

The Institute for Fiscal Studies has called on the government to reform council tax, which is currently calculated using a property’s estimated value in 1991.

Property values have changed wildly across England over the last three decades, and the IFS has said the system now punishes those whose house prices have not kept up with the rest of the country.

Department for Levelling Up, Housing and Communities figures show the annual cost of a band D council tax property in Barnet in 2024-25 is 3.3 times as big as it was in 1995-96.

Meanwhile, house prices in the area saw a 6.3-fold increase between April 1995 and April this year, meaning they more than doubled council tax rises.

Nationally, house prices were 5.6 times as big, while band D council tax has seen a 3.6-fold increase, meaning house prices have outpaced council tax by 78%.

As a result, people in Barnet have significantly benefitted from council tax valuations going unchanged.

The earliest available year for comparable figures at a local level was 1995-96.

Of the areas with comparable data, 10 of the 11 benefitting the most are in London, with residents in Hackney, Wandsworth and the City of London topping the list.

Meanwhile, 10 of the 13 worst-off areas are in the North East and North West.

David Phillips, an associate director at the IFS, said it is “increasingly absurd” that council tax valuations are based on 1991 house prices.

Phillips added: “Since this one and only valuation of houses, values have increased by massively different amounts around the country, meaning that at least half are now effectively in the ‘wrong band’.

“Households in the North and Midlands are often in too high a band – and pay too much – while those in London and its environs too low a band – and pay too little – compared to what they would under a modernised tax.

“In other words, in its current form, council tax works against levelling up.”

The annual cost of a band D council tax property in Barnet is £1,943 in 2024-25.

Meanwhile, the average house price in the area was £573,010 in April, meaning a typical household will pay around 0.3% of their property’s value in council tax this year.

Nationally, this rises to 0.7%. As a result, people in Barnet pay significantly less than their current house value indicates they should.

Labour said it has no plans to reform council tax, and is “committed to keeping taxes on working people as low as possible”.

It said it would consider the impact on councils and taxpayers before making any tax decisions.

No news is bad news

Independent news outlets like ours – reporting for the community without rich backers – are under threat of closure, turning British towns into news deserts.

The audiences they serve know less, understand less, and can do less.

If our coverage has helped you understand our community a little bit better, please consider supporting us with a monthly, yearly or one-off donation.

Choose the news. Don’t lose the news.

Monthly direct debit

Annual direct debit

£5 per month supporters get a digital copy of each month’s paper before anyone else, £10 per month supporters get a digital copy of each month’s paper before anyone else and a print copy posted to them each month. £50 annual supporters get a digital copy of each month's paper before anyone else. £84 annual supporters get a print copy by post and a digital copy of each month's before anyone else.