The booming property market in Brighton and Hove could be on the verge of collapse, economists warned today.

Research by the think tank Cambridge Econometrics suggests the growth is not sustainable in the long term and there will need to be a "sharp correction" in property prices.

The group said house prices in London and the South-East now outstripped earnings by so much the market would inevitably fall.

It raises fears about a housing recession similar to that of the late Eighties, when repossessions hit 1,452 a week.

House prices in the South East are now four times the average income, compared to the sustainable average of 3.7 over the past 26 years.

It suggests prices will have to fall by £10,855 or earnings will need to rise by the same amount for the balance to be restored.

The gap is now the same as in 1989, just before the housing market collapsed.

Average gross earnings in Brighton are £19,770, 9.5 per cent below the national average. A council report showed a family now needs to earn £40,000 to buy a modest three-bedroom property.

However, housing experts in the city do not believe we will see a housing recession on the same scale as that in the Eighties.

CE director Saxon Brettell said: "Looking at where regional affordability has reached in the current period, while the 1989 experience is not likely to be repeated, the national ratio again masks wide differences from region to region."

He added: "I feel we are at the top of the market. The only way we can go is down."

The overheating of the housing market was blamed partly on lenders giving over-generous mortgages which could lead buyers into debt. Where people were once offered three times their salary, some lenders are giving up to five times the average wage.

Howard Davies, chairman of the Financial Services Authority, said many buyers were often in a rush amid rising prices and did not think through their mortgage deals properly.

Jenny Backwell, director of Brighton Housing Trust, said she did not believe there would be a collapse on the same scale as in the Eighties.

She said: "House prices are going up for different reasons than in 1988. A lot of people from London have been attracted to move here because of the hype around the Place To Be which made people look at Brighton in a different light.

"The economy is doing very well and people are in good jobs with interest rates low.

"I think we will see people continuing to move out to places like Worthing and Shoreham and coming into Brighton to work. Some people are just coming out of negative equity so let's hope it is not the same as in 1988."

A council report showed almost 33,000 households would be unable to buy a home in the next five years and there was a shortfall of 27,000 low-cost homes in the same time period.

Gary Pickard, president of the Brighton and Hove Auctioneers and the Estate Agents Association, said market conditions were different now from those of the Eighties, but added: "I don't think huge property price increases are sustainable."