If you keep an eye on the news you might know that the housing market is poised on a knife-edge right now. In some parts of the country house prices are dropping like a stone. In other places, such as parts of London, they’re on the up and up. It’s anybody’s guess as to whether they’ll keep on rising, or fall off a cliff!

Well, as savvy gamblers know, volatile and unpredictable markets like this can offer opportunities for those who fancy catching the bookies on the hop!

So have you ever thought about betting on property prices? It’s much less common than betting on horses, dogs or football. But could be an opportunity worth considering for gamblers looking for something a little different.

How does betting on property prices work?

House price betting tends to be spread betting. The betting firm offers a spread on the rate of change of the average property price, as calculated by one of the many house price indexes, typically over the next four quarters. You can bet on whether you think property prices will rise or fall and by how much.

If your prediction is correct you will win depending on how much the actual average property price deviates from the spread multiplied by the value of your bet.

For example, according to the Halifax the average national house price is £161,132 at time of writing. Let’s assume the bookmaker offers a spread of 2.8 for the coming year. If you believe that the economy is set for a double dip recession and the average national house price next year will be nearer £155,000 for example then you might bet £1,000 on each point decrease below the offered spread. If you think the economy has turned a corner then you might bet on an increase.

Where to bet on property prices:

With the volatile housing market fewer firms now offer property price betting. But IG Index offers average house price bets based on the Halifax House Price Index. Prices are offered on the coming four quarters.

More information on how it works here

Bear in mind that betting on property prices is a very specialised type of betting. Also property price spread betting involves the same risks of losing money that other kinds of spread betting involve.

If you don’t want to spread bet on house prices and prefer a slightly more conventional bet then you might bet on the share prices of companies involved in the property market – such as house builders, construction companies, property developers, estate agency operators and property investment companies – instead.