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House prices in England are set to rise by 25% by 2013, a National Housing Federation report states.

It sees house prices reducing 4.4% in 2008, 2.1% lower in 2009, recovering by 2010 and rising at over 9% in 2012 and 2013.

There is a huge demand for homes with people living for longer, delaying marriage and getting divorced.

While there are questions over how accurate the  five-year forecasts can be, there is a general concern that new homes being built will not meet demand required.

“As soon as the economic outlook improves, house prices will resume their previous upward trajectory,” said the Federation’s chief executive David Orr.

 Some analysts however  have been suggesting that house prices will fall by up to 7% in 2008.

The Federation, which represents housing associations in England, predicts that rising demand and falling supply will raise the cost of the average home in England to £274,700 in 2013.

“People are living longer, they’re delaying getting married and they’re more likely to get divorced - meaning that we now have more households than ever,” said Mr Orr.

He said only 75% of the new homes needed were being built each year, which was also hitting the availability of affordable homes.