In a new report, the Centre for Economics and Business Research, one of the UK's most influential economics think tanks forcast a four year recovery in house prices starting later this year.
CEBR's forecast shows a 1.4% fall in 2011 but the good news for property owners is a recovery in prices of 16% over the next four years to 2015.
CEBR's Douglas McWiliams said "The main factor driving house prices up is the shortage of available housing which has already pushed up rents. Housing completions fell to only 130,000 in 2010, well below the level required to keep pace with demographic change."
Mark Crampton Smith of College and County said "The news that CEBR believe that the market is currently close to the bottom for the UK is reassuring and our investment landlords will be pleased to hear forecasts that their property values will increase again steadily over the next few years. A steady increase rather than boom and bust creates more stability in the market and is better for tenants as landlords are more likely to hold on to their properties for longer and encourage longer tenancy terms."
Of course, if inflation remains at 5% this will still result in a fall in values in reaal terms over the next four years. Never-the-less, it is certainly a less gloomy picture than that painted by some of the other pundits.