House prices have only a further 8% to fall before they start a slow recovery, economists have predicted.
Property prices will have fallen 28% from their peak in 2007 by the time they bottom out around the first quarter of next year, according to the centre for economics and business research (cebr).
However, a "sluggish" improvement in economy would mean house prices can expect to see a growth of only 6% during 2010 and 2011, it said.
The gains are expected be modest despite an anticipated increase in mortgage approvals to around 50,000 a month by late summer of 2009.
Cebr predicts average home prices will increase by only 3.1% between the fourth quarters of this year and the next, and show a further rise of just 2.5% in 2011.
The pace, it said, could improve during 2012 or 2013 with average costs rising from £144,000 at the end of this year to around £170,000 by the last quarter of 2013.
Benjamin Williamson, one of the authors of the report, said: "We have recently seen some more encouraging data on the housing market with the Halifax and Nationwide surveys showing a marked slowdown in the rate of decline in prices, and Bank of England lending data showing a modest but still noticeable increase in mortgage approvals.
"This data, coupled with anecdotal evidence from estate agents and surveyors has led some industry insiders to call the bottom of the market already but we feel that these calls are slightly premature.
"Worsening conditions in the labour market and the wider economy seem likely to counter-balance historically low interest rates and slowly improving credit conditions."
Cebr managing economist Ben Read said that "house prices are likely to remain in the doldrums for some time, as what is likely to be a slow recovery in the real economy translates into weak wage growth and stubbornly high unemployment - factors that will put a fairly heavy lid on house price inflation".
He added: "We may start to see stronger house price growth towards 2012 or 2013 as the huge downturn in new housebuilding over the past 12 to 18 months leads to significant undersupply over the medium term."
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