The rise in UK house values in recent months is a “false dawn” likely to be reversed, with prices not returning to their 2007 peak for another five years, a leading economics consultancy has forecast.

The Ernst & Young Item Club, in a report published on Monday, says that the recent stabilisation in house prices reflects an acute shortage of properties for sale, and the impact of the handful of cash buyers who have been snapping them up. The number of properties available for sale per surveyor has fallen to its lowest level since the Royal Institution of Chartered Surveyors began tracking the ratio in 1978.