A family home bought for a fraction of its current value can now be one of the most valuable things a parent leaves behind.

That is becoming more important in the North West, where house prices are rising faster than anywhere else in England. The average home was worth around £220,000 in June 2026, up 4.7% in a year.

But while property prices have moved, the basic Inheritance Tax allowance has not. It has been frozen at £325,000 since 2009 and is currently set to stay there until 2031.

It means some families who would never think of themselves, or their parents, as especially wealthy could eventually find themselves dealing with an estate worth more than they expected.

More North West estates are already paying Inheritance Tax

The latest HMRC figures show 2,080 estates in the North West were liable for Inheritance Tax in 2023/24, with a combined tax bill of £341 million.

That is still a small proportion of estates. Across the UK, fewer than one in 20 deaths resulted in an Inheritance Tax charge that year.

But the figures also come with a delay, so they do not yet reflect the latest rise in North West property prices.

And in some parts of the region, homes are already worth considerably more than the £220,000 regional average.

In Stockport, for example, the average property was worth around £314,000 in June. The average detached home was £549,000.

Owning a £549,000 home does not automatically leave a family with an Inheritance Tax bill. There are other allowances available, including an additional allowance of up to £175,000 when a qualifying home is left to children or grandchildren. Married couples and civil partners can also pass unused allowances between them in certain circumstances.

But the house is only one part of an estate. Savings, investments and other assets are counted too, meaning the final value can be much higher than the figure someone sees on an estate agent’s website.

House prices are moving while the allowance isn’t

A £325,000 allowance does not necessarily mean tax becomes due as soon as an estate passes that figure.

There is an additional residence nil-rate band of up to £175,000 where a qualifying home is left to direct descendants, such as children or grandchildren. Married couples and civil partners can also pass unused allowances to a surviving partner in certain circumstances.

But property prices do matter because a home is often the biggest asset someone leaves behind.

The difference becomes clearer in more expensive parts of the North West. In Stockport, for example, the average home was worth around £314,000 in June, while a detached property averaged £549,000.

Add savings, investments and other assets to a property at that level and an estate can be worth considerably more than families expect.

A £700,000 estate doesn’t mean £700,000 in the bank

This is where families can run into a less obvious problem.

Someone might leave behind a valuable house, savings and investments worth hundreds of thousands of pounds in total. On paper, there is plenty of money in the estate.

In reality, much of it may be locked inside the family home. Inheritance Tax is generally due by the end of the sixth month after someone dies. In many cases, at least some of the tax needs to be paid before the Grant of Probate is issued.

Yet executors will normally need that grant before they can sell the deceased person’s home.

Steve Gauke, Managing Director of UK probate finance provider Provira, said:

“The part families often don’t expect is that an estate can be worth a lot of money without actually having much money available.

“You might have a valuable family home and other assets that comfortably cover the tax bill on paper, but the executor still has to work out where the cash is coming from at the point HMRC needs paying. With property values rising across the North West, that is something more families may need to think about.”

Probate itself isn’t always the longest wait

For families in the North West, rising house prices are not a reason to panic about Inheritance Tax. Most estates still do not pay it.

But the gap between what homes were bought for and what they are worth today is getting harder to ignore. 

For families who have lived in the same house for decades, a property that once felt relatively modest may now be worth hundreds of thousands of pounds. That may be good news for the people who eventually inherit it, but it could also make the financial side of dealing with an estate more complicated than they expected.