The average property value was over £820,000 with the average estate value in the capital over £1.4m, according to figures from HMRC.

Property wealth also dominated IHT-paying estates in other southern regions, which also saw far higher numbers of estates paying the tax.

The proportion of housing wealth in IHT-paying estates dropped to 39% in the South East (£604,000), 36% in the East of England (£524,000), 32% in the South West (£474,000) and 31% in the West Midlands (£398,000) but then fell to a quarter or less in all other regions.

The regions with the highest number of estates paying the tax were London (4,190), the South East (4,990), the East of England (2,540) and the South West (2,440).

The regions with the fewest number of estates paying IHT in 2019-20 were Northern Ireland (235) and the North East (371).

The regions in which cash and securities made up the largest proportion of estates were Scotland (61%), Wales (60%), the North East (60%) and the North West (60%).

Average total estate value was highest in London (£1.43m), the South East (£1.24m), Yorkshire and Humber (£1.26m), and the East Midlands (£1.25m).

Stephen Lowe, group communications director at Just Group, said: “In London, where average property prices are far higher than the rest of the country, housing wealth makes up a bigger proportion of the wealth of estates that pay inheritance tax.

“This data was taken from the period up to the outbreak of Covid-19 and house prices rose significantly during the pandemic, with homeowners over the age of 55 benefitting from £1 billion of property value growth every single day between March 2020 and June 2022. This is likely to have tipped many more estates over the IHT threshold, perhaps without the homeowners even realising.

“It is another reminder of why it is so important that people regularly assess the value of their estate, including an up-to-date valuation of their property.”

Retirement specialist Just Group submitted a Freedom of Information request to HMRC. The 2019-20 data is the latest full financial year of available data from the taxman.