According to the latest Royal Institute of Chartered Surveyors’ ( RICS) UK Housing Market Forecast house prices will finish at 1-2% +higher in 2010 compared to current prices, with transactions likely to rise to an average of 70,000 per month from 55,000-60,000 in today’s market.

It stated that supply will increase but have trouble keeping up with demand in early 2010, and so should provide a platform for further house price rises. However, the narrowing in the gap between supply and demand will gradually begin to exert a greater influence on the market throughout the year.

Simon Rubinsohn, RICS’ chief economist said: “The imbalance between supply and demand will continue into the early part of the new year resulting in some further house price gains. However, the combination of more available property and the beginning of the exit strategy from the big stimulus programmes that have helped support the economy will gradually exert a greater influence.

“Transactions levels are likely to increase, fulfilling the Christmas wish list of many agents throughout the country but first time buyers are likely to continue to struggle to procure finance from lenders without the help of generous relatives.”

The continued cautious approach adopted by lenders, the uncertain economic climate and a flat labour market are all also likely to mean that prices will not increase by much more than they started.