The Halifax bank says house prices rose by a record 4.7% in October, and official data from the land registry reinforces worries of a runaway boom.

Here, two top economists exchange opposing views on the future of the UK property market for BBC One's 4x4 Reports.

Steven Bell at Deutsche Asset Management predicted the housing crash in 1990 and John Wriglesworth works for the property research company Hometrack.

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To: John Wriglesworth
Subject: Collapse of buy-to-let market

Dear John
The UK housing market is led by London.

Every region has benefited from low interest rates and low unemployment but what made London unique was the boom in jobs and incomes in three industries: international finance, media and technology. This attracted huge numbers of highly paid foreign workers into the capital - an influx greater than the entire working population of Frankfurt from 1995 to 2000.

This fuelled a surge in buy-to-let which pushed house prices up rapidly. Yet media, international finance and technology are now in a slump.

The buy-to-let market has collapsed and it is only a matter of time before landlords dump their unlet properties on the market. Prices at the top end of London's market are already falling, the rest will follow.

Unlike the last housing crash, interest rates and unemployment will stay low this time. But low interest rates cannot save a falling market when fundamentals turn sour - just look at Japan.

I expect London house prices to fall 20% from their peak. This time next year, house price inflation is likely to be around -10%. The South East will also suffer but the housing market in the rest of the country will stay strong.

Regards Steven Bell
Global chief economist
Deutsche Asset Management

To: Steven Bell
Subject: Shortage of housing in UK

Dear Steven We have certainly seen a boom in house prices and you rightly indicate that London has led the country.

But prices have surged because of an acute shortgage of supply and strong demand from all types of purchasers, not just from those in the higher value end of the market or in the finance, media and technology sectors.

In the 2001 census, London had almost 7.2 million people living in around 3 million households. That means there are an awful lot of people in the capital looking for somewhere to live - and it is not just the population of Frankfurt! A bit of softness at the top of the market does not mean that the whole London housing sector is set to tumble.

Housing shortages are exacerbated by lack of available land, by our laborious planning regulations and by a particularly effective green lobby. Demographic factors such as the growing number of single person households, longer life expectancy and a higher divorce rate have contributed to demand and the upward pressure on prices.

Today's mortgage rates of around 5% are as low as we have seen since the late 1950s - and no economist (whether of the "flat earth" variety or not) expects interest rates to rise significantly. People can afford to borrow.

According to the latest figures from the Council of Mortgage Lenders, first-time buyers currently spend only 13% of their income on their mortgages.

At the time of the last housing crash, interest rates rose from 8½% to 15% in just over two years. Then the Gulf War came and pushed the global economy into recession. Now, despite some economic uncertainty, consumer confidence remains quite sound and unemployment low.

Of course, certain types of property in certain localities may see modest corrections over the short term. 2003 will no doubt see a cooling of the market as compared with the 20+ % boom of 2002.

But I see no reason to panic homeowners into thinking that 1990 is set to repeat itself.

Best wishes
John Wriglesworth
Economics adviser, Hometrack

To: John Wriglesworth
Subject: Bubble will burst

Dear John
We seem to agree that the housing market outside the South East will remain firm but we disagree over the outlook for London.

You argue that a shortgage of property coupled with easy affordability due to low interest rates will support the London market.

In terms of affordability, yes, low interest rates are a huge plus. But I am suprised you cite data suggesting first time buyers find financing a mortgage a breeze. Even second time buyers stretch their finances to the limit.

You suggest there are many other jobs outside the recession-hit areas of finance, media and technology. But these are big employers paying big salaries and many other businesses, from restaurants to taxi cabs, depend on them.

London has enjoyed an influx of some 500,000 foreign workers since 1995. The last peak was in 1990 and their numbers went down by 30% the following year. The efflux of foreign workers has already destroyed the buy-to-let market. The more general impact will follow.

I would love to agree with you that the London housing market is heading for a soft landing but bubbles just do not end that way.

Regards
Steven

To: Steven Bell
Subject: Prices will go on rising

Dear Steven If we are looking at housing affordability, you must not forget that base rates have fallen from 15% in 1991 to 6% in early 2002 to 4% now.

This means that borrowers can - on paper - afford a loan three times larger than 11 years ago which would in theory sustain a tripling of house prices!

First time buyers today are also helped by the wide range of flexible mortgage deals from many lenders designed to help them buy a home.

In addition, people trying to get on the property ladder frequently get financial help from relatives. In short, the human desire to own bricks and mortar is strong and people find a way to afford it!

We do agree that expensive London boroughs - Westminster, Kensington & Chelsea, Hammersmith & Fulham - will no doubt continue to see prices fall. But I remain convinced that cheaper areas will remain robust.

Price increases in this market sector will more than offset declines at the top end and for this reason I believe that even London prices will continue to rise, albeit at lower levels.

For the vast majority of homeowners in the vast majority of areas, I think the message is: "Don't panic Mr Mainwaring!"

Best wishes
John

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Watch House Price Boom: 4x4 Reports from this page and on BBC One on Monday 11 November at 1930 GMT.