"An Englishman's home is his castle" goes the saying - and the British certainly seem more obsessed with property than some other nations.

68% of households in the UK are owner-occupied.

Though this is not the highest in Europe - with Ireland at 78% and Spain at 82% - the UK stands out because of the high level of mortgage debt.

According to figures from the Royal Institute of Chartered Surveyors, the UK's stock of mortgage debt in 1999 was 58.8%, compared to Ireland's 29.9% and Spain's 27.4%.

Standing mortgage debt as a % of GDP in 1999

Holland: 67.2% UK: 58.8% Germany: 56.4% Ireland: 29.9% Spain: 27.4% Belgium: 27.1% France: 21.2% Italy: 9.2% (Source: Royal Institute of Chartered Surveyors)

At the root of high levels of borrowing are high prices. House prices have been going up in every region of Britain - with last month's rate of increase being a record.

The market is at its hottest since the boom of the 1980s.

The average house price in Britain is now more than �100,000 and is going up by �28 a day - at a rate of roughly 15% to 18% a year.

Even in Scotland, where price rises have been lowest, they have still gone up by 8%.

Desperation

% of owner-occupied households

Spain: 82% (1998) Ireland: 78% (1998) Belgium: 74% (2000) UK: 68% (1999) Italy: 68% (1991) France: 55% (1999) Holland: 53% (2000) Germany: 43% (1998) (Source: Royal Institute of Chartered Surveyors)

The race to get onto the housing ladder is exacerbated by the shortage of housing.

The government says that in the next 20 years in England alone nearly 4 million new households will need homes.

The shortfall between supply and demand drives up prices, and worries of being priced out of the market increase people's desire to get onto the housing ladder - creating a vicious circle that has been spiralling upwards.

Compact solution

Now, in some cities, desperation to own a home has sparked the invention of the "microflat".

This is a concept that focuses on affordability and a compact design.

The flats are factory-built and assembled one on top of the other.

Microflats have 30 sq/m of living space

Richard Connor and Stuart Piercy designed the microflat because although they earn �30,000 - 35,000 a year, this is not enough to buy in London.

Stuart told Panorama: "After paying your mortgage, you have enough money to live, really. We're trying to keep it below �100,000 per flat. Looking at averages of about �180,000, �190,000, it's fairly... it is an affordable target."

Keeping payments affordable

Earlier this month, there was speculation that mortgages in the UK might have to double in length to 50 years if repayments are to remain within the reach of normal homebuyers.

30-year mortgages are already available from most lenders, but if house price inflation remains ahead of wage inflation - which is likely, say industry experts - the only way mortgages will remain affordable is by increasing the term to 30, 40 or even 50 years.

If it sounds like the property situation in this country is getting out of control, spare a thought for the Japanese.

Owning a property in Japan is even more expensive and, despite near-zero interest rates, some mortgages come with terms as long as 100 years.

Borrowers never in fact pay off the capital, leaving the property in the hands of the lender and the mortgage in the hands of the children.

And although microflats and interminable mortgages may leave some people cold, this is the price that some British people may find they will have to pay if the property climate doesn't change and they still wish to have their own "castle".