THE housing market is being "choked" by soaring stamp duty costs, a report has warned.

Campaign group the Homeowners Alliance found the typical stamp duty paid when buying a home had rocketed more than tenfold since the mid-1990s.

The average stamp duty paid by home buyers had risen from £532 in 1995/96 to £5,957 by last year, the Stamping on Aspiration report found.

The report argued that the "ramping up" of stamp duty costs by successive governments had been a major factor behind a sharp drop-off in home ownership rates.

The Alliance said stamp duty had been "transformed from a small irritant to a major dampener on housing activity", rising seven times faster than inflation over the last decade-and-a-half.

In 1997, the government made just £830 million from residential stamp duty, but by a decade later it was eight times higher at £6.68 billion, the group said.

It is urging a radical overhaul of the system, including stamp duty thresholds being raised annually in line with house price increases and first-time buyers being permanently exempt from paying any stamp duty at all.

If stamp duty thresholds had risen in line with house price hikes in recent decades, the £250,000 threshold would now be over £600,000 and the £500,000 threshold would have been lifted to £1.2 million, the group said.

The report found that the highest stamp duty was typically paid in London at £17,529, while the lowest was in the North East, at £1,466 on average.

Paula Higgins, chief executive of the Homeowners Alliance, said: "The housing market is being choked by the rising cost of stamp duty.

"The overwhelming majority of people want to own their own home, and the Government says it wants to help them.

"But the reality is that its 'home tax' is taxing their aspirations to death."

A recent study from the Office for National Statistics (ONS) showed that the proportion of people owning their own homes in England and Wales had fallen to 64% by 2011, from a 69% peak in 2001.

The Homeowners Alliance said the average stamp duty paid now equated to almost three months' worth of average earnings, compared with just over one week's worth of typical wages in the mid-1990s.

The number of stamp duty bands has risen from one in the mid-1990s to five.

The highest rate is on homes worth over £2 million, at 7%, and people buying a property worth £125,000 or less do not have to pay any stamp duty.

There have been some signs of a pick-up in the housing market in recent months, helped by various Government schemes to make it easier for people to get access to a mortgage.

The number of mortgages on the market has increased sharply and mortgage rates have been slashed since the launch last August of the Government's Funding for Lending initiative, which gives lenders access to cheap finance.

Schemes called NewBuy and Help to Buy have also been specifically aimed to give people with smaller deposits a helping hand and lenders have been reporting increased activity among first-time buyers.

But analysts have warned the Government to make sure that the schemes do not create a "housing bubble" and encourage people to stretch themselves too far financially.

Twenty years ago, just over one-third of properties were subject to stamp duty, but now that proportion is over half, the report said.

The report argued that a reduction in stamp duty rates could actually increase Government revenues, as people would feel more encouraged to move house.

Rather than paying thousands of pounds to move home when their circumstances changed, the report argued that home owners were deciding to build extensions, dig out basements or convert attics in the scramble for extra space.

The Homeowners Alliance was co-founded last year by Ms Higgins, who previously worked for the civil service, to "champion the interests of Britain's home owners and aspiring home owners".

The report used figures from a mixture of sources to make its calculations, including the Land Registry, HM Revenue and Customs and the Office for National Statistics (ONS).