The EY Item Club has moved to downplay concerns the UK could be heading for a new housing bubble in the coming weeks and months.
In its quarterly report on the economy, the body argued that even though house prices will rise by 3.5 per cent in 2013 and 6.6 per cent next year, this will not lead to the creation of a new bubble.
Peter Spencer, the Item Club's chief economic adviser, praised government initiatives such as the Help to Buy scheme for the impact they have had on the market.
"Despite the recent criticism of these initiatives, the chances of seeing another housing market bubble are extremely slim," he said.
Mr Spencer added that house prices and transactions are only now starting to recover from the credit crunch and will take some time to get back to pre-recession levels.
Chancellor of the exchequer George Osborne, speaking at the annual meeting of the Institute of Directors in London last month, denied that the UK is heading for a house price bubble.
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