House prices have increased by 11% in the last year, driven, to a large extent, by prices in London and the South-East, which continue to rise at double the rate of salaries.

The Nationwide Building Society has called the boom in house prices in some parts of the country "unsustainable".

In the past, the housing market has been slow to respond to an economic downturn.

How much longer can prices continue to rise at their current rate? Do you fear a repeat of the crash experienced in the early 1990s?

I bought my present home at the tail end of a property slump. If I were looking to buy a new home now, I would wait to see if houses prices were going to fall - or at least to stop rising quite so fast. With unemployment rising in both Germany and France, the same cannot be ruled out here in Britain. Following changes to the benefit system in the mid 1990's, this could result in a lot of people losing their homes to mortgage arrears, which in turn would probably depress house prices. If one thing is certain, it is that interest rates are highly unlikely to remain low forever. I bought my home when interest rates were high, and I don't regret that.
Quentin Hawkins, UK

Prices may stagnate but they will not fall

Nicholas Walker, UK

It makes me laugh to read about these wise people who are renting waiting for the crash. What is happening to their rent? It's money down the drain. I have moved twice in the last 5 years making over 60k in profit. Prices may stagnate but they will not fall.
Nicholas Walker, UK

As the stock market has performed badly and with low interest returns on savings, people have moved into property as a way of making a return on their money. Unfortunately (particularly in the area of Northern England where I live) this means first time buyers cannot compete, especially as investors can offer cash on the spot. Some individuals here own over one hundred homes, and buy more on almost a weekly basis. One way to combat this would be to increase stamp duty by 1% for each extra property purchased. This would deter those who are playing monopoly with real houses, but not inhibit the smaller investor as greatly.
John Ford, UK

I think first time buyers should wait for house prices to come down because at the moment they are far too high.
Jason, UK

I do not believe that house prices will crash. Salaries in central London are still very high and demand is huge. I have just bought a property and have made £20k so far this year, which is great. With the high numbers of rich people from overseas looking to buy a place in London and the supply of good housing so small, simple economics states that while demand is greater than supply the prices will continue to rise. Anyone whom has bought in the last year will know that there are very few properties in the good areas and if they exist they are gone within days.
Andrew, London, UK

I hope not. I've just bought!

Gary Dale, England

I hope not. I've just bought!
Gary Dale, England

I am single and have just bought a 2 bed semi - my first home at the age of 35! I could not afford to live in my chosen area of Merseyside. The county area receives Objective One finance via the EU. House/flat prices are high here. I have had to move to a less prosperous area due to this. My belief is I was drinking in the last chance saloon otherwise I would never be able to pay-off a 25 year mortgage.
Paul Sinker, UK

House prices don't fall unless a lot of homeowners find it impossible to sustain their mortgage payments and are forced to sell. This only happens if interest rates rise abruptly and unexpectedly, and that isn't on the horizon. Most likely, house prices will stabilise and property market turnover evaporate. (I extend my sympathy in advance to the estate agents.)
Very few of us would be prepared to borrow three times our salary to punt the stock market, however we're told that's a sensible way to buy a house. This is nuts. In both cases you are establishing a highly geared position in a risky asset. This is what hedge funds do. If we are going to put capital at risk, it ought to be invested in something that generates real wealth (e.g. a company that turns metal into cars, or a service provider that people actually need). "Investing" in property is betting that its scarcity will keep on increasing for ever; it doesn't generate jobs, spending, tax revenue or any other beneficial knock-on into the real economy. We are poorer as a nation because of our over-priced, inefficient property market.
Alastair Alexander, UK

I think that house prices will fall. Why, well the IT sector in the UK is in a recession. I suggest that people should wait to a buy house until next year.
Nick Bishop, England

Those people who claim that house prices will not fall have a vested interest to profit from their home(s). All the indicators for a house price correction or fall or whatever you may want to call it are clearly visible. If people cannot afford decent homes and there is news of widespread job losses in the developed countries like the US, UK, Europe, etc then surely this will happen. I'm amazed we get ourselves into this cycle time and time again.

The Government is in a no-win situation. Increasing interest rates to control house price inflation will affect businesses, who will have to increase layoffs in the current global climate. Reducing interest rates to keep businesses competitive will have no effect on the current levels of house price inflation. It may even help increase it. Eventually, interest rates will have to go up and then the crash will follow suit. What we really need is an interest rate for the housing market and an interest rate for businesses. In this way, we can keep a check on house price inflation without affecting businesses.
Sultan Khan, UK

Can someone please explain how house prices have been rising by such a large percentage, particularly in the South East, when salaries have certainly not been increasing by a comparable amount? My only guess is that a large number of people are now heavily geared and if interest rates start to creep up, could find themselves in a rather tricky spot.
David M, UK

The housing market is not going to crash this year. There are a few factors to prove this. Firstly, rental prices stagnate while the cost of buying is on a bull run. The flipside to this is that rental prices actually grow in a downturn. The cumulative effect is that a downturn makes investing in property more effective from a value approach, and produces greater "dividends". This attracts more buyers for investment reasons, as well as a few first time buyers who can now afford a better place, and prices will rise again. Its no good praying for the mother of all crashes, it simply is not going to happen.
Steve, England

People who believe that rent is "dead money" are mistaken. If you like where you live and your rent does not exceed 25% of your earnings then stop whingeing! You should be happy! If you don't like where you live or if it's too expensive, then move - it's a free country.
Rex Lombardo, Brazil

The only people who can afford a house are those who already own one

Paul, UK

The only people who can afford a house are those who already own one. Unfortunately the crash which is on the way could well affect the people who would like to buy now but cannot. We may end up with a two-tier country. Homeowners who bought before 1999 and those who didn't. This could bring with it a lot of social problems.
Paul, UK

I think the most likely scenario will not be a house price crash but a levelling off. There is still very strong demand in London and whilst interest rates are low houses are a lot more affordable than before the 90's crash. Also London is the centre of the service industry, one part of the economy that is still very strong. Some pressure on the entry price could be to introduce legislation limiting the maximum borrowing on a house to be, say, 75%. This would also reduce the risk of overexposure and negative equity. I'm afraid at the moment those hoping for a crash will be disappointed.
David Goldsworthy, UK

The first thing to ask before you buy property is "can you see yourself living there?" Don't get trapped in an unsellable studio like I did in the last crash. Just wait - you'll be able to afford your dream home one day, and by waiting you will help keep prices down.
David, UK

I seem to recall that the early 90's crash was a consequence of the large increase in interest rates designed to choke off the inflation caused by Lawson's late 80's boom. Interest rates are more stable now so a UK wide crash is not likely. For London and the South East the problem seems to be one of demand far exceeding supply and planning restrictions on affordable new house building must play a big part in this. For the rest of us, especially in areas depending on the UK's rapidly disappearing manufacturing and agricultural bases, local crashes are certain to happen. It will be back to negative equity again for quite a lot of homebuyers.
Sid Fewster, UK

What is the point of buying something that is only just short of a 1-bedroom squat for £120,000?

Eddie, UK

Having lived in the South East for a couple of years, I have refused to buy a house on principal. What is the point of buying something that is only just short of a 1-bedroom squat for £120,000? Maybe if economic investment was more geographically diversified instead of being concentrated solely in what would seem to be one area. Then house prices would reflect this, giving it a more even keel and resulting in lower prices throughout the country.
Eddie, UK

If you don't like the house prices where you are, change job and move up here. There are loads of 2 bed terraces at £20K and you can get a nice 3 bed detached for £60-70K. House prices in the south are inflated by people wanting to live near the bright lights of the South East rather than for any good reasons.
Martin, Grimsby

The mere threat of a crash can be self-perpetuating. As potential buyers wait to see if there's going to be a crash, their hesitance can force it to happen. Personally, I would welcome this, as it is just not possible to save a deposit fast enough at the moment.
Rhys Jones, UK

The worrying trend is the cheaper interest rate enticing people at the moment, this will no doubt lead to a new wave of repossessions as seen in the past.
Keith Greaves, UK

I don't think house prices will crash too much

Jonnie, UK

I don't think house prices will crash too much, since there are far too many people out there who have decided they're waiting for a crash to buy up. This means as soon as there is a downturn, these people waiting in the wings will swoop in for their bargains, and the demand will increase once again. The other thing to bear in mind, is that the house only has value when people sell. This means that in a downturn, people will not sell unless they have to, thus reducing the supply of housing. With the increasing number of single people living alone, there is simply not enough housing.
Jonnie, UK

As a first time buyer who has just bought a house, I am half expecting a slight reduction in prices but hopefully not a crash. Not only would I lose out on the price of the house, but also there wouldn't be so many people looking to rent it off me.
Craig, UK

It all comes down to supply and demand. The NIMBYs have, for 25 years or so, fought against most new housing developments. So now there are lots of house-buyers chasing too few houses, which, of course, pushes the price up. Time for some sanity - relax planning laws (particularly in rural areas) and let's get building!
Pete Morgan-Lucas, Wiltshire, UK

How about increasing council tax significantly for second homes?

Richard N, UK

I agree with your correspondents who say much of the pressure on house prices is from people buying more than one home to rent out. By all means let market forces prevail, but how about increasing council tax significantly for second homes?
Richard N, UK

The 'housing market' is the biggest pyramid scam ever - and it's legal!
Martin Adams, UK

I think history will repeat itself again this time and we will have a crash soon or later. The fact of the matter is that the only people who are going to lose are those who bought their property at the peak.
Jalil, UK

Prices are going to collapse late this year, early next year. Only a fool would be buying now.
Rowland, UK

The UK is obsessed with property

Andy, Surrey, southern UK

The UK is obsessed with property. You can borrow hundreds of thousands for a house. Try borrowing a few thousand for a business - and that creates jobs! The property market must be reformed. Maybe then we can enable public service workers to buy houses and could well tackle the North-South divide. Property speculation is the heroin of the middle class southerner.
Andy, Surrey, southern UK

In reply to Pete, I agree that much of the housing boom is being caused by people buying extra homes to rent out. However, this will come to an end as the rents that are charged increase in line with house prices. Eventually, if you can't afford to buy, you also won't be able to afford to rent, and then the lack of tenants will cause the house prices to fall as the landlords sell off the houses. To prevent this situation the first measure that should be taken is that all council tax should be payable only by the owner of the property, not by tenants - and at double the normal rate.
Duncan Hurwood, England

House prices in the South are definitely too high compared to earnings

Tom Durrant, UK

With blue-chip and new technology companies announcing falling profits, layoffs and salary freezes this will no doubt cause an economic downturn, which we are already seeing the stock market. But like the FTSE house prices will definitely fall, but not crash. House prices in the South are definitely too high compared to earnings, and first time buyers are being priced out if the market so a correction is very likely.
Tom Durrant, UK

I left the UK two years ago, having made a 100% profit on my house over a period of 5 years. Nice but obscene. I firmly believe that house prices are overvalued by as much as 30%. If the media kick-in and headline-news an imminent crash, then prices will fall quickly.
Mike, UK/ Switzerland

Fear it? I am fervently praying for it! I am a young professional, earning acceptable money, and the only thing I can afford in this entire city is a 1-bed flat in the most dangerous, run-down area. This is utterly ridiculous. Suppose that I and my wife wanted to have kids now - with 55% of my income going on rent, how would we even afford to feed them, even if I could fit them into my tiny box of a home?
Alastair Stevens, Bristol, UK

House prices are unlikely to crash

Lewis Aldridge, UK

House prices are unlikely to crash. The reason for this is the low interest rate environment. I actually feel that prices will continue to rise as long as you can get low interest rate deals such as 6.59% capped for 25 years. With the security that these deals give, consumers are likely to push the boat out that much further. The current figures show that 20% of income is going towards housing. That is not very high. House prices will only fall if interest rates are forecast to rise significantly or if the Government implements CGT on people's homes. I feel the latter is the bigger threat.
Lewis Aldridge, UK

House prices in London are ludicrous! As a first time buyer with a good job in London I can't afford to buy anything I would consider living in, and if I stretch myself with a huge mortgage the repayments will be enormous. Bring on the crash... something has to change.
Simon, UK

Prices in Poole, Dorset have gone crazy. Young single professionals in this area may get their long awaited turn on the property ladder instead of the well established property tycoons who are making a killing from the rent charges. A downturn has to be good news for us!
Sara, UK

As public transport becomes more and more unreliable London property will continue to rise in value

Richard, London

I live in Limehouse, London, in a two bed flat I bought two years ago which has since risen by about 44%. Like most people I know I have not gained really - I simply cannot afford to move up the ladder. However, I do not foresee a sustained fall in London house prices. I am able to walk to work and, as public transport becomes more and more unreliable London property will continue to rise in value because people will find it harder and harder to get to work. I genuinely feel that the way to relieve the pressure on London house prices is to allow people to either work from home or at least work more flexible hours so the pressure on our crumbling transport infrastructure is relieved. The technology for this to happen is available - why not use it?
Richard, London

The argument used by estate agents that house prices are still affordable is only sustained by the current low mortgage interest rates and high employment. When unemployment rises and the pound drops as they surely will then interest rates will rise and the bubble underpinning the rise in house prices will burst - and we will be back to the negative equity and repossessions of 10 years ago. Estate agents cannot lose - they stimulate rising house prices and hence their own ever-increasing turnover and when the bubble bursts they pick up more money from the unfortunate people whose dreams are repossessed.
Bert, UK

Rich people tend to invest in property and rent it out. What I think is currently happening is that the rich are buying up the property (hence fuelling the price increase). First time buyers are completely priced out of the market and have no option but to rent - which is great news for the landlords which have been buying up all the property and will continue to because of the huge number of people who have to rent. It's a vicious circle and I personally don't think the house prices will crash will this trend continues!
Pete, UK

Speaking as an estate agent in London, I can appreciate that it is frustrating for first time buyers getting on to the property ladder. I experienced the very same problem, and started to look in Greater London where I bought a 3 bed house for the same price I would have paid for a studio flat 10 miles further in. I still have access to underground, rail, and road links to central London.
Tom K, UK

Another cause of this mess is that the demand for houses is far higher than the actual need. This is thanks to a great many people buying second homes they don't want or need, but can flog on for a quick profit or let out indefinitely. Such profiteering of a very finite resource locks the poor first-timer out of the marketplace.
RJH, UK

I think what happened to the stock market is going to hit the housing market

Chris Mullin, UK

I think what happened to the stock market is going to hit the housing market. Rental values alone do not justify the cost of buying (just as dividends don't justify buying shares). The only thing propelling house prices is the view that they will keep on rising. However, when people start pulling out (prompted by job layoffs and stagnant wages), the bottom of the market could just fall away.
Chris Mullin, UK

Like the economy as a whole, if people keep saying house prices will crash, they eventually will because of a loss of confidence.
Keith Legg, UK

I don't think house prices can continue to rise in this way, particularly in the South of England. I bought my one bedroom flat in Surrey 3 years ago for £75,000 after ten years of saving for the deposit and by committing a huge chunk of my salary to mortgage repayments. A recent market appraisal has set this figure to one hundred and fifteen thousand pounds. Sounds a lot, doesn't it? But there's no point in me selling because I can't afford to buy anything bigger or better within a one hour drive to work. My salary has gone up a bit, but not as much as house prices. I'm thinking of chucking in my job here and moving further up North, so that I can afford to buy something better than a poky little flat with no outdoor space and no parking. For those who think that we in the South have it easy because our property is worth such a lot, remember - it's all relative.
Isabel Graves, Surrey, UK

House prices are far too high

Sharon B, UK

House prices are far too high and this means that first time buyer like me are locked out of the market being forced to spend dead money on high rents. Getting a flat of my own at a reasonable price would mean lower monthly housing payments and security but until prices come down I am forced to spend my income on rent to a landlord who only benefits whilst I lose out. I welcome a crash in the market, as I'm sure do many others.
Sharon B, UK

The current surges in house prices cannot be sustained given the slowing of the economy. As a homeowner this is of concern given that one of the reason for buying was as an investment. Luckily I do not live the South East and I am confident that my property will retain its value given the more realistic prices in other parts of the UK. Those in the South East will, however, I fear suffer from falling values, and if there is a downturn in the economy it will be felt hardest there.
Nick, UK

I am not worried about a fall in house prices. As a young person who is currently renting, I cannot afford to purchase a good size house in the area I want to live in. I am just waiting for the fall so I can jump in and get a bargain.
Carli, UK

I hope they do crash. Then I might be able to afford a house.
Glyn Dulson, UK