LIVERPOOL property experts have dismissed claims the city will be part of a general property market crash in the north of England with prices set to fall by 30% in the city.

This weekend, leading investment analyst David Pannell forecast the market was on the verge of collapse because the average house price in the city was more than £100,000 - six times the average wage.

The problem has been blamed on buy-to-let investors who snap up smaller one and two-bedroom houses, outpricing first-time buyers.

Mr Pannell, of London investment bank Durlacher, said: "Buy-to-let investors tend to target one and two-bedroom properties at the lower end of the market.

"This has pushed up prices in Liverpool to not far short of £100,000, or around six times typical local wages.

"It just doesn't make financial sense. It's not as if there's a housing shortage issue in Liverpool. If anything, it's over-supplied.

"The critical importance of buy-to-let investors is that it has replaced first-time buyers. We believe this situation represents one of fundamental imbalance."

Just last month figures revealed Liverpool's winning of the Capital of Culture title had helped cause a phenomenal rise in house prices while those cities that missed out on the title trail behind.

Since the city was named 2008 Capital of Culture, the average cost of a home has gone up by 21.2%.

By comparison, defeated Capital of Culture hopefuls Birmingham saw house prices rise by just 11.8%, Oxford by 7.6%, Cardiff 12.2% and Bristol by 1.9%.

Only Newcastle and Gateshead followed Merseyside's trend - seeing a 21.7% rise. Economists point out the area has seen similar levels of investment for regeneration as Liverpool.

Land Registry figures put the average house price for Liverpool at £90,233, with a terrace house averaging £59,400; semi-detached £118,013 and detached £222,421.

In Allerton, three-bedroom Victorian terrace houses were up for sale for between £150,000-£170,000. Similar properties in Tuebrook are on the market for approximately £75,000 to £90,000.

But James Kersh, of Sutton Kersh estate agents, said the local housing market was much more complex than the City analyst had realised and claims there will not be a crash.

He said: "Within the Liverpool city boundary alone there is investment in areas undergoing regeneration and a high quality of housing stock available.

"Within specific communities there are large pockets of people who have no cultural or personal desire to own their own property and the risks associated with it."