http://www.teletext.co.uk/personalfinance/homes/default.aspxen-gbWed, 15 Jul 2009 12:00:33 GMThttp://www.teletext.co.uk/images/Logo64x64.gifhttp://www.teletext.co.ukHouse prices may not return to last year&#39;s levels until 2020 or beyond, according to a new report.<img src="http://feeds.feedburner.com/~r/news/finance/homes/~4/KvGZiuwdMsE" height="1" width="1"/>
Accountant PricewaterhouseCoopers (PwC) said recent predictions may have heralded a "false dawn", with prices set to fall further next year followed by a flat period for prices 2011.

The research dampens hopes that the housing market's recent green shoots are the beginning of a longer recovery.

Property prices in 2015 in real terms - after adjusting for inflation - could still be below 2008 levels, PwC says.

It believes there is a 30% chance this might still be the case by 2020.

John Hawksworth, head of macroeconomics at PwC, said: "Although the estimated average UK house price overvaluation of 25% in mid-2007 has been eliminated, our analysis suggests that house prices could still have further to fall."

"The pace of recovery in house prices seems likely to be relatively modest until the middle of the next decade.

"But it could pick up again beyond that as supply shortages reappear, and credit conditions return to normal."

The PwC price warning follows some signs of stabilisation in the UK property market.

Between February and June, several studies reported sporadic increases in property prices following a solid 18 months of falls.

Nationwide's monthly study showed prices rising for four consecutive months. But Halifax reported a 0.5% price fall during July.

Economists have warned they expect price falls due to rising unemployment, which is expected to rise from 7.2% to nearly 10% in the next 18 months.

The prospect of falling wages and ongoing problems in the mortgage market may also undermine values.

A survey from the Royal Institution of Chartered Surveyors showed in June its members predicted house prices rises for the first time since May 2007.

The balance of surveyors reporting falling rather than rising prices improved from -43.8% in May to -18.1%.

Rics said: "Although the balance remains negative, it is the highest reading since September 2007."

Meanwhile, a National Association of Estate Agents report suggests the gap between the asking and selling prices for homes was 1.9% in June.
Source: thisismoney.co.uk

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