The recent increase in house prices is a "false dawn", according to influential forecasters the Ernst & Young Item Club.
Recent figures have shown rising property prices and an increased interest amongst potential buyers. But the Club has predicted that it will take at least five years for property prices to return to their 2007 levels.
Mortgage availability in July rose 19 per cent when compared to the same month in the previous year. But Ernst & Young has attributed rising interest to a "small number of cash-rich buyers" looking to take advantage of low prices.
The majority of mortgage deals on the market require borrowers to have a deposit of at least 25 per cent.
Many analysts have suggested that the recent apparent upturn is unsustainable, and that the UK economy runs the risk of entering a "double-dip" recession. There is concern that a premature removal of government support packages would lead to a second period of economic contraction.
