There has been a tenfold increase since the mid-1990s in the average stamp duty paid by homebuyers, a campaign group has warned.

Homebuyers paid on average £532 in stamp duty in 1995/96 but that had risen to £5,957 by 2012, according to a report by the Homeowners Alliance.

The average stamp duty paid now equates to almost three months' worth of average earnings, compared to just over a week's worth of typical wages in the mid-1990s, it said.

And that huge rise is having a marked effect on the residential property market, the group believes.

Its report, called Stamping on Aspiration, suggests stamp duty has "transformed from a small irritant to a major dampener on housing activity".

It argues that the increase is a key factor behind falling rates of home ownership over the period.

As a result it wants a major shake-up of the stamp duty system and is calling for stamp duty thresholds to rise annually in line with house prices while making first-time buyers exempt regardless of the house price.

According to the group's figures, if stamp duty thresholds had been pegged to house price rises in recent decades then the £250,000 threshold would now be over £600,000 and the £500,000 threshold would have been pushed up to £1.2 million.

And it argues successive governments have been cashing in at the expense of property buyers, suggesting that the government made just £830 million from residential stamp duty in 1997 but that figure was eight times higher at £6.68 billion just 10 years on.

The Homeowners Alliance chief executive Paula Higgins said the residential property market is being "choked" under the increasing weight 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," she said.

Figures recently released by the Office for National Statistics (ONS) show the proportion of people owning their own homes in England and Wales fell from a peak of 69% in 2001 to 64% in 2011.

Under the current stamp duty system the highest rate applies to homes worth over £2 million, at 7%, while people buying a property worth £125,000 or less do not have to pay any stamp duty.

There have been some encouraging signs in recent months that the residential property market is becoming more vibrant after a challenging period during the wider economic downturn.

Various Government-backed schemes are up and running with the aim of injecting life back into the housing market, such as the NewBuy and Help to Buy initiatives designed to help homebuyers with smaller deposits get a foot on the ladder.

The Government and industry faces a tricky balancing act in creating a sustainable boost, however, with some observers warning about the risks of another housing bubble prompted by people overstretching themselves financially.

However, the Stamping on Aspiration report argues that reforming stamp duty could be an effective way to reinvigorate the market while actually increasing rather than hitting Government revenues.

It suggests more people may be encouraged to move house as opposed to staying put and investing in home improvements if the costs of doing so are made less prohibitive.

The report used figures from various sources, including the Land Registry, HM Revenue and Customs and the ONS, in making its calculations.

Former civil servant Ms Higgins co-founded the Homeowners Alliance last year to "champion the interests of Britain's homeowners and aspiring homeowners".