Now experts tell homeowners to STOP worrying as prices will rise by 30%

The rare optimism will delight homeowners who have been worried by gloomy predictions in recent months.

The Centre for Economics and Business Research predicts the housing meltdown will stop in the middle of next year and believes that by the end of 2012 average house prices will be up by more than £50,000 to a record £226,000.

Gloomy: Investor behaviour indicates house prices could fall by 30 per cent by 2011

Homeowners who have bought in recent years and feared their home would never be worth the price they paid for it will be particularly relieved.

There have been predictions that within a year around 1.7million homeowners will be in negative equity, where the size of their loan exceeds the value of their home.

The CEBR says the lack of new homes in England is one of the key factors that will fuel the house price recovery.

Housebuilding has almost come to a halt. Construction firms say there is no point putting up new homes during a mortgage drought and when confidence is so low. Yet the demand for new housing continues from groups such as divorcees and immigrants.

Other factors, such as mortgage lending picking up and the Bank of England cutting interest rates from 5 per cent to 4.25 per cent next year, could also cause prices to pick up.

Struggle: A fifth of all Northern Rock mortgage holders could face negative equity by 2009, it is claimed

The CEBR's positive prediction about house prices is the second in recent days. Last week, the National Housing Federation-said it expects prices will keep on falling in 2009 but start to recover in 2010 and 'rapidly increase' in 2011.

Its research paper, compiled by Oxford Economics, also said the lack of new homes being built will push up prices.

However forecasts of another housing boom are a blow for first-time buyers who are hoping that prices will drop to a level where they can finally afford to step on to the property ladder.

Twenty per cent of those with a Northern Rock mortgage 'will be in negative equity within 12 months'

One in five homeowners who have a Northern Rock mortgage will be in negative equity within a year, figures from the bank revealed yesterday.

It raises the politically explosive prospect of a Government-owned bank evicting thousands of families from their homes.

Latest figures show 22 per cent of the bank's total residential mortgage lending was handed out to those who put down a deposit of 15 per cent or less.

Many will already be in negative equity - when the size of their loan is bigger than the value of their home - because they took out loans for 100 per cent or more of the property's value.

Northern Rock pioneered this controversial type of lending, handing out mortgages worth up to 125 per cent before its collapse.

Still more homeowners will be hit if house prices continue to fall, as is widely predicted.

More than one in ten home-buyers are in negative equity or close to it, the HSBC said yesterday.

The revelation came as the bank unveiled half-year profit figures down 28 per cent on last year, from £7.1billion to £5.2billion.