Tales of the zeitgeist are legion; house-hunters camped for eight days outside an agent's office to buy ex-naval married quarters at Crownhill. Contracts were exchanged on all 84 houses within three hours.
A similar race took place at Gosport, in Hampshire, where 150 purchasers queued for the privilege of snapping up 152 homes the minute they came on to the market. And at Euston Road's Lizman's House, in central London, 18 of 20 contracts were exchanged within an hour of the launch. The deal on the other two was struck moments later.
House price inflation is booming, as figures published this week by both the Halifax and Nationwide confirmed. In central London, where values have more than doubled since the last recession, family houses now start at more than pounds 1m.
Old-fashioned estate agency wars have erupted in parts of the South-East where a chronic shortage of property has made any house coming on to the market gold dust. Agents have been accused of not passing on offers fairly, selling properties they are not instructed to sell and deliberately scuppering each others' chains. The Halifax has been fined pounds 6,000 following the unprofessional conduct of one of its agents.
But the fun could be about to turn sour. Both the Halifax and Nationwide reported that house prices are now more than 9 per cent higher than a year ago across the country as a whole, including areas that remain deeply depressed.
This is perilously close to the 10 per cent threshold that experts agree will prove a watershed for the Bank of England. At this point it can no longer ignore the froth building up in the property market and will be forced to raise interest rates. The lesson of history teaches that once the market gets up a head of steam, people feel richer and start borrowing against their winnings. Before long, the whole economy is spinning out of control.
The real fear is a rerun of the disaster of the late 1980s. After doubling in five years, prices started to fall sharply, particularly in London, where they slumped by a quarter. In the early 1990s around 1,000 families a week lost their homes through mortgage debt and more than a million were trapped by negative equity.
That cycle of boom and bust was triggered by a very specific set of circumstances, not least the Government's bungled withdrawal of joint tax relief, a booming economy, a cut-throat mortgage price war, an abundance of equity release schemes and historically low interest rates.
By contrast, today we have a cut-throat mortgage price war, low interest rates, flexible and current account mortgages and low unemployment - but also (and this is the major difference) a superbly managed withdrawal of mortgage interest tax relief (Miras), which will be completed next April.
But, ironically, some commentators believe that it is this final extinction of Miras, which in its own way has been holding back the market, that could store up trouble for the future. Its demise removes from the Government the only other method than interest rates of controlling spiralling prices.
Price rises have not been uniform during this boom. They are still falling by 10 per cent in parts of Wales and the North-West. Even in London there are as many black as hot spots. Prices in Barking and Dagenham for example grew by only 1.92 per cent in the last quarter. Higher interest rates could prove a severe set back to many areas still struggling to shake off the recession.
In central London, where prices have entered the realms of fantasy, nearly half of all properties are bought not by ordinary families, but by foreign investors. Yet to put a brake on this activity, higher mortgage bills may be forced on all home-owners - even those whose homes are still plummeting in value.
As an alternative, the Joseph Rowntree Foundation, a left-wing think tank , this week suggested that some form of capital gains tax, as is imposed on most home-owners in Europe, might be a better deterrent against excessive profits in particular regions. However, it is hard to see any UK government introducing such a measure and surviving.
More likely, the market will cool of its own accord following Bank of England interest rate hikes before Christmas and again next year. The spectacular crash of the 1980s is unlikely to be repeated, unless stock markets go into freefall and there is a bloodbath in the City of London.
But the risks of a more serious downturn increase all the time inflation roars unchecked and affordability becomes stretched. House prices in Germany have been falling for seven years now after just such a boom, simply because people cannot afford to buy.
Stifan Mitropoulos, a Deutsche Morgan Grenfell analyst in Frankfurt explains: "We have plenty of supply but no demand. There is a problem, particularly in the East with empty houses. We had a construction boom to provide good quality housing to meet the country's needs. But people just didn't earn enough to buy them." How much more can prices rise before that sentiment is echoed in Britain?
How To Clinch The Deal And Beat Rival Buyers
l Badger estate agents remorselessly. Houses change hands as soon as the vendor calls an agent in many hotspots. He passes details on to his most pressing buyers. Make sure you are on these priority lists.
Be prepared to move quickly. Agents are likely to put up obstacles at the slightest whiff of a higher offer.
Don't raise tiny obstacles and nitpick over minor faults. There will be other buyers in the wings and you'll be ditched.
Be resigned to paying much more than you really want to for a house if you want to be the preferred buyer.
Avoid sealed bids where possible. Prices are going through the roof.
Consider chain-braking finance to keep a purchase moving.Reuse content