HOUSE prices will continue to stabilise over the next two years, economists from the Royal Institution of Chartered Surveyors (RICS) forecast.

Prices in England and Wales should rise by an average of six per cent a year - still far lower than the 12 per cent recorded during this year.

The RICS say the levelling out of house prices is a response to the difficulty first-time buyers are having entering the market.

Ian Perry, RICS housing market specialist, said: "The housing market continues to stabilise. All the signs and predictions indicate that this will continue for some time to come.

"This can only be good news for everyone, especially those first-time buyers who have been put off from buying by the fluctuations in the housing market over the last 12 months."

The prediction of a six per cent annual increase in house prices is in line with forecasts from mortgage bank Abbey National on Monday.

Figures for the three months to November showed that 22 per cent more surveyors reported price rises than reported falls.

This represented an improvement on the seven per cent figure reported in the October survey.

But the number of sales was down by 19 per cent for the three months to November