NEARLY three million English households face council tax increases of up to  400 a year from a government reassessment of local tax bands, based on new estimates by Halifax.

The first revaluation since the present bands were set in 1991 could push about 2.8 million households into a higher council tax band in April 2007, with residents in Alnwick, a small district 30 miles north of Newcastle, most likely to be asked for more cash.

In Alnwick, voted the Best Place to Live in Britain by Country Life in 2002, the average house price has risen by 330 per cent in the last 14 years, compared with a national average of 186 per cent. Halifax expects this to push the average household in the district up from Band B to Band D — making it the only place in Britain to move up, on average, by two tax brackets — increasing the average present annual payment by  290 to  1,318.

Residents in Hammersmith and Fulham in London, Mid Suffolk, North Cornwall and Westminster are the next most likely to face a council tax rise with the North West and West Midlands local authorities set to be the worst-hit regions, according to Halifax.

A one-band rise would add  135 a year to the annual bill for households in council tax bands A to C, and  270 for bands D to F, based on the present average council tax costs across England.

It would add  405 to households in Band G, the second highest band, taking their average payment to  2,468. Unless a new higher category is introduced, Band H, the top bracket, would remain at its present level of  2,428.

But, overall, the reassessment is likely to lead to more households paying less than paying more, according to Halifax’s estimates, which assume that the revaluation will apply the average English house price inflation to all existing council tax bands. About 3.7 million English households are likely to be moved to a lower tax band after the reassessment with residents in Bradford, Stoke-on-Trent and Ashford in Kent the most likely to see a reduction in their council tax.

More households are likely to pay less council tax than more, because more houses have risen in value by less than the national average than have risen by more. This is because the most expensive houses have risen by a higher percentage than the cheapest ones.