The Item Club says there must be a recovery in mortgage lending
The recent rise in UK house prices is a "false dawn", an economic forecasting group has warned.
The Ernst & Young Item Club says property values will not return to their 2007 peak for at least another five years.
However the latest figures from mortgage lenders show a continued revival in lending to house buyers.
The number of loans granted for house purchase in July this year was 19% higher than in July 2008.
Turn in the market?
The Council of Mortgage Lenders (CML), which published the figures, said they showed the "first material annual growth" since early 2007, which was just before the UK property market was hit by a sudden downturn due to the onset of the credit crunch.
"It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing," said the CML's economist Paul Samter.
"But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being."
The CML said the number of new mortgages granted to house buyers stood at 56,000 in July, up by 24% from June and 19% higher than a year ago.
But the Item club argued that the increase in prices this year was largely due to an "acute shortage of available properties" and "a small number of cash-rich buyers".
"The supply of these funds is limited, which means prices are likely to dip again in the first half of next year," said the forecasters's economist Hetal Mehta.
The Item Club is the latest commentator to argue that recent upturn in prices reflects an unusual position in the market that is unlikely to last.
It pointed out that many homeowners are either trapped in negative equity or reluctant to sell for fear of having to absorb the losses of the past two years.
The sharp downturn in prices that started in 2007 seems to have come to an end this year, though whether or not prices are actually rising again is a matter of debate.
The Nationwide building society has said that UK house prices are £7,000 higher than the start of the year, while its big rival lender the Halifax says prices are in fact roughly the same.
The Item Club argued that as 56% of homeowners have a mortgage, any sustained recovery would have to be underpinned by a recovery in mortgage lending.
However, as the CML acknowledges, banks are still rationing the amount of money they are lending.
"The scarcity of mortgage supply and tough lending criteria is making it particularly difficult for first time buyers to enter the market," the Item Club said.
"Given that they typically purchase cheaper properties, this will have significant implications for those looking to trade up, clogging up the market and limiting the number of transactions taking place," it added.
The continued rationing of mortgages means that first-time buyers still have to put down an average deposit of 25%.
But the cost of mortgages charged at a lender's standard variable rate has continued to drift down since the Bank of England lowered its bank rate to a historic low of just 0.5% earlier this year.
In July, according to the CML, new mortgages on an SVR were charged an annual interest rate of 3.9%, the lowest since the CML's records began in 1993.
Moving house, as opposed to buying one for the first time, continues to be the preserve of the middle-aged.
The average home mover is still 40, the oldest since these records started in 1974.