Suffering homeowners were offered a ray of hope yesterday with a prediction that house prices are likely to rise by 25% over the next five years.

In defiance of a welter of doom-laden figures on the property market, research for the National Housing Federation claimed the downturn would be over by 2010, leading to a return of rising prices.

Its optimism was based on the shortage of property being so acute that the decline will not become a full-blown bust.

But in the short-term there is no relief. The research, carried out by Oxford Economics, forecasts prices falling by a further 2.1% next year before beginning to rise in 2010, edging ahead by 1.3%.

It predicts a rise of 5.2% in 2012 and 9% in each of the following two years.