New research suggests that the housing market will recover over the next two years, pushing prices up towards a record high - 14 per cent higher than current levels - by 2015.
The report by the Centre for Economics and Business Research (CEBR) predicts that the average cost of a home in the UK will increase from the current £176,000 to more than £200,000 by 2015.
This would take prices well beyond the previous peak in 2007, when the average house was worth £191,000.
The CEBR says that one reason for the expected increase is the lack of new houses being built. 225,000 new homes need to be built each year to cater for demand homes but it forecasts that only 110,000 will be built.
There are various reasons why 225,000 new homes are needed, including an increasing trend of people living alone and the UK's increasing population.
The report concluded that the rise in prices will not take the form of a house price boom, but will be a
gradual rise based on supply and demand.