It has been predicted that there is a 20 per cent that house prices will fall between now and 2010.

Accountancy company PricewaterhouseCoopers (PwC) stated that the most likely pattern of events will be a significant slowdown in the inflation of house prices, rather than a crash.

Head of macroeconomics at PwC John Hawksworth stated that there is "clearly some risk" of a fall in house prices over the next three years, but that such risks are moderated by continuing housing supply constraints.

"The most likely scenario is for a slowdown in the housing market rather than an outright fall in prices," he told the Press Association.

Mr Hawksworth concluded by stating that there was only a "relatively small chance" that house prices would be lower in real terms in 2020 than they are now.

In related news, the Council of Mortgage Lenders recently predicted a one per cent increase in house prices in 2008.