UK house prices expected to rise next year

House prices will rise by one to two per cent next year, with gains in the first few months of 2010 followed by stagnation and modest falls in the second half of the year, according to the Royal Institution of Chartered Surveyors.

British house prices fell to a five-year low in early 2009, but have since rebounded by 10-15 per cent from their low point, giving a 2.7 per cent rise for the year to November, according to mortgage lender Nationwide's index.

RICS forecast last year that this index would fall by around 10 per cent over the course of this year. For 2010, RICS said an initial upward effect on prices caused by a shortage of property relative to the number of registered buyers would fade.

"The combination of more available property and the beginning of the exit strategy from the big stimulus programmes that have helped support the economy will gradually exert a greater influence," said Simon Rubinsohn, RICS's chief economist.