A "modest"five per cent rise in house prices is expected next year, although it could be some time before the market returns to its pre-recession levels, according to realcomparison.com.

The firm's commercial director Francis Ghiloni noted that a five per cent increase is "possible"in 2010, thanks in part to lenders becoming more willing to offer mortgages to first-time buyers and increased competition in the sector.

However, he noted that "reckless lending"will likely become a thing of the past, thanks to increased cautiousness on the part of providers and new rules governing affordability, which he said will "act as a brake".

Furthermore, he said people who have been "biding their time"and saving during the recession may find that there are now better opportunities to buy property than there may have been 18 months ago.

In September, the average house price in England and Wales increased to £158,377 - a 0.9 per cent increase on the previous month's figures, according to the Land Registry.

While property prices in London have risen for five consecutive months, values are still 3.2 per cent down compared with year-on-year figures.

Written by Claire DoyleADNFCR-2002-ID-19471447-ADNFCR

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