What's going on?

Data out on Tuesday showed UK house prices rose at their fastest annual pace since 2004, in a frustrating game first-time buyers don�t have any chance of winning.

What does this mean?

UK house prices have been pushed up and up by ultra-low borrowing costs, a limited supply of properties, and a temporary tax break on purchases (that, as of Wednesday, will be phased out). Plus, Brits have had their hearts on upsizing after a year spent staring at the same four walls. So much so, in fact, that London was actually one of the weakest-performing regions as homebuyers swapped the urban hubbub for tense village politics. All in all, it�s driven the average house price to a record $353,000 � a figure which both threatens to broaden the wealth gap and leave the next generation of buyers out in the cold.

Why should I care?

For you personally: Won�t somebody please think of the children?
It�s true that the typical mortgage payment isn�t actually all that high compared to monthly salaries by historic standards, thanks to record-low rates. But cheap mortgage payments don�t mean much if you can�t afford somewhere in the first place, and house prices relative to average incomes are close to an all-time high. That�s making it harder than ever for prospective first-time buyers trying to get their foot on the property ladder.

Zooming out: It�s the same story all over the world.
House prices aren�t just soaring in the UK: data out last week showed average US house prices rose 24% in May compared to a year ago, hitting a record high for much the same government-stimulated reasons as the UK. And now, Bloomberg Economics has pointed out that certain indicators � like the ratio of global house prices to rent or locals� salaries � are higher than they were even in the lead-up to the 2008 financial crisis, suggesting this bubble could be about to burst.