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Experts are predicting that the average house price in England is set to rise by 25% over the next five years.

According to a new report published by the National Housing Federation, average house prices in England will rocket to £274,700 by 2013, despite immediate fears of a housing market crash.

The association’s paper, entitled Home Truths 2008, says that house prices will continue to fall into 2010, but then increase by 5.2% in 2011, 9.2% in 2012, and then another 9.3% by 2013.

The report states that while demand is growing, this rapid house price rise will be attributed to the lack of supply of new housing, which is falling each year. The report also says that at least 223,300 households are expected to form each year to 2026, and expected to add further to housing demand.

David Orr, chief executive of the HBF, says: “Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory.

“People are living longer, they’re delaying getting married and they’re more likely to get divorced – meaning we now have more households than ever.

“One in thirteen households is registered as being in housing need, with four million people now living in cramped or difficult conditions.”

Although prices are set to rise once more, right now they are still falling: the Land Registry says the average house prices in England and Wales fell 1% this June, taking the average price to £180,781.

It says annual house price growth is showing a decline for the tenth consecutive month, with an increase of 0.1%. It also says that during April 2008 the number of completed house sales fell by 39% to 57,831.

With the current falling prices, coupled with rising mortgage rates, more consumers are turning to independent financial advice as recession looms: according to Unbiased.co.uk's latest report, over 250,000 consumers requested details of independent financial advisers in the first half of 2008.

And as the UK economy wavers canny consumers have been seeking advice on personal retirement planning and mortgages, with equity release also an increasingly popular topic - over 30% of Unbiased’s searches for details of local IFAs requested advice on retirement planning. Also, more consumers are now asking for advice on whether to release equity from their homes.

Concerns over the housing market continue to prompt consumers to seek advice on mortgages: approximately 50,000 people requested a local adviser to help them on mortgages in the first half of 2008.

David Elms, chief executive of Unbiased.co.uk, says: "Our latest report demonstrates that when consumers are most worried about their finances, they put their faith in IFAs to guide them.

“Consumer needs are constantly changing and whole-of-market IFAs are the best-positioned of all advice types to serve these needs. It is also reassuring that with increased interest in equity release products, consumers are seeking the gold standard of advice in order to decide on whether such products are appropriate to them."

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