Hometrack has predicted that a low volume of housing transactions will fuel volatility in the market next year.

The consultant says UK house prices will grow 4% in 2007, on the assumption that interest rates do not rise above 5.25%.

But the survey also predicts that the historically low levels of first time buyers able to afford a home will result in low turnover, with just 5.5% of properties changing hands next year.

Hometrack director of research Richard Donnell said: 鈥淭he housing market is moving into uncharted territory as we enter a period of low growth and lower turnover, a trend not seen since the 1950s.鈥�

Donnell dismissed concerns that the housing market was suffering from an over-provision of flats. He said three bedroom plus family houses made up 60% of housing stock in the UK and that many of these dwellings were underoccupied.