UK house prices could be set to fall 30%, City firm Durlacher has predicted.
Is the market heading for a crash?
The firm warned the growth of buy-to-let investment meant the UK housing market was looking like a bubble.
"Weak regulation... abuse and declining standards of underwriting by some lenders" was to blame for a huge rise in house prices since 2000, it said.
But a separate review of housing markets in 14 European countries concluded that prices in the UK were slowing, but would not collapse.
Durlacher's review of the UK housing market, entitled "Bubble trouble", concluded that UK housing market peaked in 2001.
Since 2001, the report said, a combination of speculative buy-to-let investment and lenders stretching income multiples lay behind recent price growth.
First-time buyers will soon be outnumbered by buy-to-let investors, it concluded.
This, it warned, was not good news for the UK housing market.
"Buy-to let is more dangerous than its small share of the overall market would indicate," the report said.
"40% of buy-to-let deposits are from remortgages of existing properties and this has helped crowd out first time buyers."
The possible slide in prices, Durlacher said, could be triggered by a combination of higher interest rates, increased lender caution and tighter regulation of the mortgage market.
Overall, Durlacher predicts that house prices will fall by 30%, starting in the second half of 2004.
Ominously, the report suggests the housing market bust could be "very messy".
"We expect transactions to drop sharply, mortgage lending to decrease by 55% and widespread mis-selling allegations."
Slow, not slide
At the same time, however, the European Housing Review published by the Royal Institution of Chartered Surveyors (Rics) strikes a very different note.
The review of the housing markets in 14 European countries concluded that UK house prices would not crash in the foreseeable future.
Home shortages and high levels of income should prevent an early 90s-style crash occurring, the report said.
Instead, UK house price inflation would see a "gradual deceleration."
Overall, the Rics survey saw the UK, along with France, Spain and Ireland, enjoying the fastest price growth in 2003.
At the other end of the scale, house prices in Germany, Austria, Denmark and the Netherlands stagnated in 2003.