The report – researched by independent economists Oxford Economics – forecasts that house prices will fall in 2009, start to recover in 2010, and then rapidly increase from 2011.
The paper, Home Truths 2008, says that house prices will increase by 5.2 per cent in 2011, then 9.2 per cent in 2012 and another 9.3 per cent in 2013.
This would take the typical price at the end of the period being well above the average in 2007 of £222,600.
In the short to medium term, the report suggests that house prices will fall by 2.1 per cent in 2009 and then increase by 1.3 per cent in 2010.
The report also states that while demand is growing, supply of new housing is falling, with only 75 per cent of the new homes required being built each year.
NHF chief executive David Orr says: “Our report shows that despite concerns about the current housing market downturn, house prices will increase substantially over the mid to long term.
“Demand for housing is going up, while the supply of new homes is going down. This means that as soon as the economic outlook improves house prices will resume their previous upward trajectory.
Orr believes the effects of the credit crunch could hit the delivery of affordable housing and that the Government needs to work with housing associations in a flexible and innovative way in order to ensure current housing targets are met.
“Ministers need to support housing associations in developing mortgage rescue schemes that prevent households from losing their homes. They should also support housing associations in buying up unsaleable private developer homes of a sufficient standard.”