The top 10 UK areas set to pay more council tax than London’s richest borough

The Royal Borough of Kensington and Chelsea in London is famous for homing millionaires with house prices surpassing £1m, yet their council tax is cheaper than nearly 300 areas in the UK.

New analysis from the i reveals that 291 areas in England are expected to pay more council tax than Kensington, London’s wealthiest borough. This comes with the tax increases by 5% hitting households in 2025. 

Authorities had the green light to increase the levy this week after a spokesman for the Prime Minister confirmed on Wednesday that the council tax cap of 5% will remain in place for the coming year. 

Council tax rates can be increased by up to 5% currently, but need permission from the government to push them further than this. 

Official data shows that the rich London borough holds the title of the highest house prices in the country with some of the UK’s wealthiest residents. The average house price is £1.17m, yet it has one of the lowest council tax rates. 

It has the fifth cheapest council tax rate, this follows the London boroughs of Wandsworth, Westminster, the City of London and Hammersmith and Fulham. 

Kensington and Chelsea currently pay a rate of £1,530 for band D properties – the 5% rise will mean this will increase to £1,607. However, Rutland in the East Midlands has the highest council tax rate in the country with residents currently paying £2,532. 

The new increase will see properties pay £127 more next year, taking the figure to £2,543 despite the average house price being £380,000 – three times lower than Kensington. 

The top 10 areas with the highest council tax are:

1. Rutland – £2,670.15
2. Nottingham – £2,656.5
3. Dorset – £2,629.2
4. Lewes – £2,628.15
5. Wealden – £2,608.2
6. Newark and Sherwood – £2,591.4
7. Bristol – £2,583
8. West Devon – £2,579.85
9. Gateshead – £2,573.55
10. Oxford – £2,564.1

Lewes, Dorset and Nottingham are among the higher paying areas where their new council tax bill will set them back over £2,000 per year with the 5% increase in 2025. Homes in these parts of the UK cost between £200,000 and £380,000 on average.

Earlier this year, the government announced that the average band D council tax bill for 2024/2025 was £2,171 a raise of £106 (5.1%) on the previous year. 

Concerns have been raised by the local authorities about the impact of inflation amid a wider funding crisis as many councils have warned the government of the potential need for emergency bailouts to avoid bankruptcy over the next few years.