Share indices in the week to 21 June 2002
Britain may not have been formally incorporated as the USA’s 51st state, but a look at the housing statistics for the two countries suggests that the special relationship does not consist solely of Tony doing everything George Dubya says.

Our US cousins have experienced double-digit house price rises and demand outstripping supply as planning constraints choke off production – which sounds rather familiar. And like the UK, housebuilders cannot keep up with demand and are building 1.6 million homes a year when about 1.7 million are needed.

Housing demand in the USA is set to be strong for another 20 years at least, as baby-boomers and immigrants continue to trade up.

This is good news for UK building materials firms such as Wolseley and Heywood Williams, which are big in US housing.

Of course it isn’t all good news. Apart from those massive price increases, US economists are as terminally pessimistic as ours with regard to the sustainability of the housing boom.

But the difference is that they say any drop in the market will be short-lived.

It’s a different take on the market compared with the UK, where investors are edging out of housing stocks because of fears of another deep and painful downturn.