Global real estate firm CBRE says UK house prices could rise by up to 8% over the next three years, with London properties increasing by as much as 22%.
Although values are expected to fall marginally in 2012, CBRE's latest house price forecast believes UK house prices will start to rise again next year. Central London properties will continue to outperform the wider housing market, with values increasing by 6% in 2012, and by a total of 22% over the next three years.
Jennet Siebrits, CBRE's head of residential research, said: "Despite the market being characterised by monthly fluctuations, the longer-term outlook for the housing market is fairly static. We don’t expect it to pick up until the economy fundamentally improves.
"Low interest rates are continuing to stave off repossessions and forced sales, but a substantial proportion of would-be buyers remain unable to move. Ultimately, bank lending still needs to loosen further to spur on housing market activity."