A Nut Bin of One's Own.(U.K. house prices)

Britain's housing market has hit such dizzy speculative heights, it was perhaps inevitable that bookies would jump into the game. Last month IG Index, London bookmakers to the superrich, launched a novel bet on real estate. It offered clients worried that a price collapse may soon wipe out the value of their homes a chance to offset the risk with a fat bet on the collapse. Hundreds of clients have already taken the hedge, some of them risking [Pound sterling]25,000 or more. Says IG Index spokesman Paul Austin: "Except for the weather, house prices seem to be the focus for every conversation these days."

Property mania in Britain is back. After a steady rise in the late '90s, home prices are tipping skyward. Last month alone the value of the average house rose a dizzying 4.5 percent. The annual rate of increase now stands at 18 percent, double the figure last September. Newspapers are filled with stories of converted public toilets selling as [Pound sterling]135,000 "studio" apartments or London homeowners who've seen their wealth double without stirring from the couch. Would- be buyers, afraid to miss the opportunity, are taking out mortgages equivalent to four times their salaries. The only question now is just how long the boom can last.

Doomsayers say the end is near and may come suddenly. Earlier this month the Bank of England warned that "price rises were unsustainable." There's widespread talk of an early interest-rate hike to dampen the market. Estate agents already report a new wariness among buyers. The buy-to-let market is on the slide as rentals fall. At worst, that could mean an abrupt turndown, says Cambridge economics professor Wynne Godley: "These bubbles don't deflate; they get pricked." The memory of the last great spike in the late '80s is unhappy--and not only for homeowners. Property prices tumbled 30 percent as interest rates rocketed and unemployment soared.

For some, the next bust can't come too soon. Public employees who work in inner London, for example, can't possibly buy a home there. Last week Mayor Ken Liv- ingstone pledged that up to half of all new developments would be "affordable housing." But it may prove beyond the power of government to change the basic psychology: British fondness for a home of one's own fuels ...