House prices 'will continue to rise'

A report from PricewaterhouseCoopers (PwC) suggests that it is likely that house prices will increase at a faster rate than consumer price inflation over the next three years.

According to the accountancy firm, there is a one in five chance that house prices will be lower in three years' time than they are presently.

Meanwhile, there is a one in three chance that property prices will be lower in real terms in 2010, the report states.

However, the firm claims that the most likely scenario is that prices will have risen above the rate of consumer price inflation - although the rate of growth will probably be slower than it has been in the recent past.

"There is clearly some risk of house prices falling over the next three years, but these risks are mitigated by continuing housing supply constraints," said John Hawksworth, head of macroeconomics at PwC.

"The most likely scenario is for a slowdown in the housing market rather than an outright fall in prices," he confirmed.

PwC also envisages house prices will rise above the rate of inflation until at least 2010.

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