Double-digit house price inflation has been caused by a combination of low interest rates, relatively high disposable household income and the popularity of property as an investment when stock markets have performed poorly.

BBC: House prices 'to rise 12% in 2003'

According to the Bureau of Economic Analysis, spending by households on many of modern life's "basics" food at home, automobiles, clothing and footwear, household furnishings and equipment, and housing and utilities fell from 53% of disposable income in 1950 to 44% in 1970 to 32% today.

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For instance, in France and Germany, household shareholdings are equivalent to less than 20% of their annual disposable income, compared with 100% in America and 65% in Britain.

ECONOMIST: On the edge | The