By Clare Matheson
BBC News Online business reporter
Earlier this month the Bank of England said it was delaying a rate rise - even though it believed prices in the housing market are unsustainable.
Will prospective buyers see prices slump this year?
The bank's bearish stance contrasts sharply with a number of surveys which have confounded claims that the bubble is about to burst.
Figures from leading mortgage lenders show prices surged early this year after stalling towards the end of 2003.
But some experts have been flagging up an impending market crash for months.
On Tuesday, London fund manager Tony Dye lived up to his nickname of "Dr Doom" by forecasting that the present property boom would "end in tears".
Mr Dye earned the gloomy epithet for his pessimistic predictions - including forecasting the technology market crash, albeit some years before it happened.
Now he has turned a similarly jaundiced eye towards the housing market.
"There are signs of a huge boom going on and basically these things always revert to more rational price levels," he says.
"It's part of the eternal cycle."
London prices, he says, are likely to sink by 30% over the next five years - while a "national decline of the same order" would present little surprise.
He is not the first to tout a drop of such magnitude: City firm Durlacher warned in February that buy-to-let investors were crowding first time buyers out of the market.
Its report, Bubble Trouble, ominously suggested a market crash would be "very messy".
"We expect transactions to drop sharply, mortgage lending to decrease by 55% and widespread mis-selling allegations," the report says, forecasting that the price drop would kick off in the second half of 2004.
On the face of it, recent Government figures appear to back up Mr Dye's beliefs.
The latest figures from the Office of the Deputy Prime Minister actually showed that prices fell by 1% in February.
However, many experts discount the ODPM data since it is not seasonally adjusted.
Nor does it include cash purchases, which make up 25% of the market.
Capital Economics is also taking a pessimistic line, although it has tempered its forecasts somewhat.
Late last year, it was predicting a slump for 2004.
But the group's Ed Stansfield says "price rises early this year have taken us all by surprise, but we still maintain the market is overvalued".
He adds the prices still need to fall by 20%, but the market will not show any signs of cooling until November or December, but "more likely 2005".
A lack of housing stock has helped push up prices, experts say
Mortgage lenders, in contrast, tend to predict a slow correction in the market, rather than a lurch towards falling prices.
The Woolwich says it expects a slowdown - if the Bank of England raises rates in the near future, as expected.
The group warns that historically, rates rises have taken time to bite - but once they do, they slow the market down.
Andy Gray, head of mortgages for the Woolwich and Barclays, says the slowdown would be underpinned by interest rates.
But other factors would also play their part: House prices are now way ahead of average income, and household accounts would also be stretched by higher council tax bills as well as by the higher mortgages caused by rising interest rates.
"These factors combined will almost certainly dampen housing market activity," Mr Gray says.
Prices to build
Martin Ellis, chief economist at Halifax, agrees that prices are heading for a "gentle slowdown" during the remainder of the year.
But, he adds, pressures which have pushed prices up - such as housing shortages, high employment and historically low interest rates - would remain and so prevent a crash.
"Although interest rates are expected to rise they will remain historically low," he says.
Therefore, he says, as a percentage of earnings mortgage repayments will remain on the same level.
But this brand of caution was not for Nationwide.
Just two weeks ago the UK's largest building society revised up its forecasts for house price growth in 2004, to 15% from an original 9%.
The upward revision came just days after property website Hometrack doubled its 2004 forecast for price rises in England and Wales from 4% to 8%.
"Despite a rise in interest rates, there is little chance of a significant economic downturn this year," according to group economist Alex Bannister.
Price rises may start to slow toward the end of the year, he says. But a slump "remains unlikely".