UK properties could be overvalued by as much as 12 per cent, according to the International Monetary Fund.
Housing markets of other leading world economies could be similarly overvalued, the body has said.
Société Générale global strategist Albert Edwards told the Telegraph that the housing bubble could burst in any new recession.
According to the Halifax, the average UK house price rose to a new high of £230,280 in July
Those investing in buy-to-let properties could face a SDLT (Stamp Duty Land Tax) surcharge, on top of stamp duty, if plans by the Chancellor Philip Hammond go ahead. The original three per cent surcharge was introduced by George Osborne when he was head of the Treasury.
House prices are being depressed by the expected summer slump, but also by a surge in sellers, according to Rightmove, the UK's biggest property selling website. An 8.6% increase in newly available properties was recorded in July, but demand has failed to keep up, Rightmove noted.