New figures have revealed that homeowners who bought their property at the peak of the market could be stuck in negative equity for at least another five years as the market struggles to recover from the downturn.

Research by the National Housing Federation found that house prices will fall by 12.2% this year, suffering a further plunge of 4.6% in 2010 before a slight rise of 1.1% in 2011.

Those that purchased their home in 2007 - the peak of the market - may have to wait as long as 2014 before they see any profit on their property, according to the organisation.

The grim figures also suggest that homeowners in the North West of England and the East Midlands could have an even longer wait.

It is predicted that overall there will be a 20% rise on current average house prices to £227,800 by 2014, with values climbing 8.4% in 2013 and 6.8% in 2014.

Chief executive David Orr said that although house prices were still continuing to fall in the short term, they would inevitably increase in the long term because of a fundamental under-supply of housing.

"Even though house prices are falling, and are set to remain sluggish in some areas for the foreseeable future, affordability is not improving for many low-to-middle income households," he said.

"For millions of people who want a home, getting a mortgage can be like winning the lottery. First-time buyers and those wanting to buy shared-ownership properties remain victims of a deep freeze in mortgage lending."

He added: "Until lending is freed up, young and lower-income households without access to large deposits will be locked out of the market."

According to economists Oxford Economics, which produced the figures for the Federation, house prices in England in 2013 will be 3% below their pre-credit crunch peak of 2007, but by 2014 they will be 3% higher.

Copyright © Press Association 2009