George Osborne boost as economy 'begins to grow The number of housing sales taking place in the UK will bottom out this autumn before recovering "in earnest" early next year, with house prices set to follow, the report predicts. The forecast signals a turnaround in the property market, which has been in the doldrums for years. House prices tracked by lenders Halifax and Nationwide fell by 0.5pc and 0.4pc respectively in the three months to September, against the previous three months. Over the past five years, they have fallen 19pc in total, Item calculates. However, it sees house prices regaining their 2007 peak over the next four years, with price inflation of up to 3pc next year, rising to around 5pc annual growth. The housing market recovery will be driven by a rise in transactions as the wider economy finally starts to improve, after the eurozone crisis delayed the recovery by a year, Item forecasts in its report. A major curb on the UK market is lifting as banks finally show more readiness to lend, priming the housing market for recovery early next year, Item believes. Meanwhile, the outlook for consumers is improving as inflation drops and private sector employment holds steady. Mr Spencer said: "One of the biggest headwinds facing the UK has now begun to ease - lending has started to loosen up and we're hopeful that the housing market is primed for a recovery early next year. There are plenty of 'ifs and buts. The big question is the extent to which consumers will choose to grasp the opportunity or continue to deleverage and to pay down their debts. Item believes that the change is coming as the banking sector is at last in a position to use its inflow of customer savings to boost domestic lending. Crisis-hit banks have paid down their borrowings from overseas banks and the Bank of England, while they have also been boosted by the Bank's new Funding for Lending scheme, designed to increase the flow of credit. Monday's report cites the recent Bank of England survey pointing to a record rise in the availability of mortgage credit, the sharpest since it began in 2007.