Millions of households face inflation-busting price rises from March

Telecoms and energy companies have come under fire for hitting hard-pressed households with aboveinflation price rises.

Firms including BT, EE and Virgin Media are preparing to push up prices from next month, raising the costs of everyday bills for millions of customers. BT said it planned to increase bills by the consumer prices index rate of inflation plus 3.9 percentage points, 4.5pc in all, from March. The move will hit all 30 million new and renewing BT users.

This is despite a pledge by the firm in 2019 that future price increases would be in line with inflation. Mobile and broadband provider EE, part of BT Group, announced similar price hikes.

Virgin Media is preparing to push up costs by as much as £54 per year for millions of its broadband, TV and phone customers from next month.

Customers will see bills increase by between £2.50 and £4.50 per month, depending on their package.

James Daley, of consumer campaign group Fairer Finance, said: “It’s insensitive of broadband, phone and TV companies to be pushing through large price hikes while many households are still struggling from the economic impact of the pandemic.”

Mr Daley said these companies had been beneficiaries of the crisis, as people working at home have been more likely to upgrade their broadband and TV packages. He added: “This makes it all the harder to justify these increases.”

Rail fares will also rise above inflation from March. Fares are due to increase by 2.6pc, one percentage point above the retail prices index. The continued use of this discredited index has also been criticised by campaigners who say CPI, which is typically lower, should be used instead.

Ministers said the increase was due to the £10bn spent keeping rail services running through the pandemic.

Meanwhile, energy bills for 11 million households will rise by £96 after regulator Ofgem raised its price cap, which sets upper limits on standard tariffs. The regulator said the higher prices were because wholesale energy prices had increased in the last year.

English buyers fork out nearly six times as much tax when they purchase a home compared with those in New York, new data shows.

Though residents of England face much higher initial transaction taxes, annual property tax bills are far lower than other countries. The tax structure therefore discourages people from moving house but is relatively affordable over the long term.

When the stamp duty holiday ends on March 31, an English buyer purchasing a home worth £500,000 will pay £15,000 in tax. Analysis by Knight Frank estate agents showed that a buyer in New York purchasing the same value property would pay only £2,583 – little more than a sixth.

Telegraph Money compared property taxes in 10 world cities, including Hong Kong, Miami and Mumbai, based on a buyer purchasing a primary residence with no foreign surcharge after March 31 2021. At the £500,000 benchmark, English buyers pay half the transaction tax charged in Mumbai and Madrid, and 25pc less than those in Dubai and Sydney.

However, domestic stamp duty bands mean that this bill rockets to become one of the highest in the world as the property price increases. An English buyer purchasing a home worth £1m would pay £43,750 in tax. This is 132pc more than a buyer in Vancouver, though still £16,250 less than in Madrid.

At £2m, however, English buying costs surge to £153,750 – the highest out of the 10 cities analysed.

The bill is 90pc higher than in Hong Kong. In Miami, a buyer could purchase 21 £2m properties before their transaction tax bill was comparable.

This does not mean English homeowners pay more tax overall, however. Annual property tax bills such as council tax are relatively low versus the international stage.

Kate Everett-Allen, of Knight Frank said: “England is firmly purchasefocused compared with other cities where annual charges are higher.”

In London, the average council tax bill on a home worth £500,000 (assuming it is in Band D) over 10 years would be £15,437. This is a third of the £45,288 bill in New York. Crucially, council tax in England does not increase at nearly such a dramatic rate for higher priced homes as it does for stamp duty. The average, 10-year bill for a home worth £2m in London (assuming it is in the maximum Band H) would be £30,874.

A buyer purchasing a £ 2m home pays 10 times as much stamp duty as a buyer purchasing one worth £500,000, but the £2m homeowner will pay only double the council tax.

In turn, this council tax bill is a tenth of the annual property tax bill in Miami, where the owner of a £2m home would pay £295,310 over a decade. Including purchase taxes and 10 years of annual taxes, a £2m homeowner in Miami would pay a total of £302,542. In London, a £2m homeowner would pay 39pc less.

An estimated three million people over the age of 65 want to downsize but are unable to, partly due to moving costs, according to research by Homes for Later Living, a campaign group.

Debating a petition for a six-month, stamp duty holiday extension in Parliament, Ben Everitt, Conservative MP for Milton Keynes, described the tax as “a brick on social mobility”. Mr Everitt called for a long-term “exit strategy” from stamp duty.

Conservative MPs have urged the Chancellor to overhaul property taxation by scrapping stamp duty and council tax and replacing both with a proportional property tax.

Under plans drawn up by campaign group Fairer Share, homeowners would pay an annual tax equivalent to 0.48pc of the value of their home.

Analysis by WPI Strategy consultants found 19 million households would make average annual savings of £435. But the savings would be funded by tax hikes on homeowners in more expensive parts of the country, namely London and the South East.

A Treasury spokesman said: “We have no plans to introduce a new form of annual property tax, which would mean soaring bills for many hard-working families and pensioners who have saved and improved their homes.”