Local estate agents in areas identified by a market research company as the most vulnerable places in the country for a property crash, are hotly disputing the research.

Top of the property crash hot spots list, compiled by market research company Experian, is west Berkshire, including Newbury.

Penwith in Cornwall, which includes Penzance, was ranked second. Houses in Cornwall now cost an average £180,000, more than double the price of four years ago. South Holland, Peterborough was named third on the list.

Six of the top 10 areas were in the South West and in most of these, the recent boom has been heavily dependent on people from elsewhere buying second homes.

Neil Blake, Experian's director of economics, said: "We looked for areas where prices have become most overvalued since the mid to late 1990s, when the market was at a more normal level. If there is a pricking of the house-price bubble, these areas will be the most vulnerable."

If the economy falters, says Experian, this market is expected to decline rapidly, and sellers will have to rely on the lower incomes of locals.

Dispute

But estate agents are hotly disputing the research. While a property crash is not impossible, they say, a gradual rather than "brutal readjustment" in the local housing market is far more likely.

Cornwall estate agent Philip Wilkins, of PA Wilkins and Co, told the Cornishman newspaper yesterday that there would always be people who want to move to such a beautiful area.

"There are obviously people still wanting to move here,” he said, “but there are not enough new houses being built and people have to rely on existing stock, and because demand is outstripping supply, then prices will remain firm. I can't see any reason why prices will crash in this area and we have not noticed any decline in demand."

Angela Newton, a partner in AP Sales estate agents, which has offices in Spalding and Holbeach, near Peterborough told Peterborough Evening Telegraph: "House prices in the area have increased briskly in the last couple of years, but the market is not out of control.”

"There is a big demand for housing in the area at the moment, so prices are likely to continue rising. Unemployment in the area is virtually nil and South Holland is becoming a more desirable place in which to live.”

Experian also looked at possible problem areas in less overvalued regions. Newcastle upon Tyne, for example, is more vulnerable than the rest of the North East, even though the rise in the price-income gap there has been below the national average.

The least vulnerable area is Burnley, where prices have dropped by more than 10% in relation to incomes.