As house prices rise globally, in Britain they are soaring. In the past 20 years they have increased by more than in any other country in the G7 (see chart 1); by some measures British property is now the most expensive in the world, save in Monaco. It is particularly dear in the southeast, where about one-quarter of the population lives. According to Rightmove, a property website, at today's rate of appreciation the average London property will cost £1m($1.5m) by 2020. The booming market weighs heavily on the rest of the economy. People priced out of the capital take jobs in less productive places or waste time on marathon commutes. Young Britons have piled on mortgage debt-those born in 1981 have one-half more of it than those born in 1961 did at the same age-making them vulnerable to rises in interest rates, which are coming. Some will retire before they pay it off.
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