Yet in London and the South-east, the stories are equally blood-chilling. The most expensive house on record went on sale last month priced at pounds 35m and flats in once-hated system-built council blocks sell for pounds 150,000. This extreme polarisation is creating a headache for policymakers.
Lending has surged in recent months while surveys from the Halifax and Nationwide show accelerating price rises, bringing back memories of the boom-and-bust era of the late Eighties when a housing market collapse helped plunge the country into a recession. If the housing market is set for another rise, then rate increases would be needed to prevent an inflationary boom. But if sharp rises are localised, an increase in the cost of borrowing could kill off the housing market in depressed areas as well as other sectors of the economy.
According to a report yesterday by FPD Savills, the estate agents, the problem is likely to get worse. A lack of supply of homes in the right areas, growing demand and changing demographic patterns will drive up prices in some areas, while leaving others saddled with unwanted stock.
It warned that London - the trigger for all previous booms - was enjoying a sharp rise that would probably spread to the rest of the UK. Yolande Barnes, the research director at Savills, said: "After a short period last year when the London market seemed to be wisely responding to signs of potential overheating, it appears to have turned a blind eye to the fact that the UK economy officially ground to a halt in the first three months of 1999. We know fast-growing markets have a tendency to overheat - the question is by how much and when this will be corrected."
Halifax last month raised its annual forecast for house price inflation by 50 per cent to 6 per cent after recording a 2.1 per cent monthly rise - the largest for six years. Nationwide said prices are rising by 7.4 per cent. Both organisations publish figures this week, starting today with Nationwide.
But this rise will be unevenly spread. Deutsche Bank forecasts the market will split sharply between the "soaring South and nodding North".
While it believes prices in the South-east will rise 10 per cent next year, followed by London at 8.5 per cent, the North and Yorkshire & Humberside will grow by just 2 per cent - real term deflation. Chief economist Steven Bell said the market was being driven by income growth, implying that poorer areas will be caught in a spiral of decline as falling income leads to falling house prices in turn leading to lower wealth.
"Regions which experience the strongest relative rise in income also record the strongest rates of house price inflation. In the past couple of years this has been the South-east and especially London. We believe this is set to continue."
Savills says the picture is even more complex with vast disparities within individual cities as properties at the "posh" ends of cities such as Bristol, Glasgow and Manchester reach the pounds 1m mark while streets of terraced houses built for workers in dead industries are going for a song. Ms Barnes said: "Our view may be summed as up as `polarisation, polarisation, polarisation' - polarisation by property types, polarisation geographically and polarisation of prices over time."
This has another negative impact for policymakers. As prices divide between North and South, between manufacturing area and services boom zone, it will be increasingly difficult for workers to move home. While the policies of the last two decades have liberalised the labour market, little has been done to deal with housing inflexibility.
While 140,000 manufacturing jobs have been lost over the last 12 months, only in the South have they been replaced with new service sector jobs, allowing redundant workers to find new jobs without moving home.
A report today from the National Housing Federation today warns that it is becoming difficult for key workers such as teachers and nurses to live in London - priced out of the private sector and unable to get a scarce council home. Baroness Dean of Thornton-le-Fylde, the chair of the Housing Corporation, warned that this would divide the country. "If that happens then you are talking about `two nations'. That's totally unacceptable because the whole nation will pay."
To compound the problem for policymakers, millions of homeowners have been handed a windfall by the post-war housing market. More than a third of the 24 million owner-occupiers - 37 per cent - own their home outright. With the average home worth about pounds 70,000 this equates to assets of pounds 560bn.
Much of this untapped wealth is in the hands of pensioners who may be tempted to supplement their reduced fixed incomes by taking advantage of historically low mortgage rates.
A sudden release of equity and a rise in consumer spending could add to inflationary pressures.
It would also exaggerate the severity of any fall in the housing market as homeowners suddenly found themselves with high debt levels but less valuable homes - again reminiscent of the Eighties.
The Government has made it clear that it wants no return to the years of boom and bust. The housing market presents it with a real challenge.Reuse content