The North West will be at the forefront of a revival of house sales next which could see the market recover to its highest level since 2007, experts have said.
The Royal Institution of Chartered Surveyors (RICS) predicted UK house prices will increase by 2% over 2013, while rents will rise at double this rate as the squeeze on the sector continues, surveyors have forecast.
RICS said that factors such as a multi-billion pound Government scheme to boost lending will result in some improvements showing through in the housing market next year, as the wider economy remains tough and uncertain.
This is likely to result in a 3% year-on-year increase in sales, with 960,000 transactions forecast to take place next year, which would be the highest number since 2007.
Sales activity is expected to improve noticeably in London, the South East, Wales and the North West. However, the improvement will still be modest by historic standards as total sales in 2007 amounted to 1.62 million, and first-time buyers will still struggle to make the jump onto the property ladder.
The South East and the North West are set to see a modest pick up in prices, but the rest of the country will either see prices dip slightly or remain flat, RICS said.
Meanwhile, the pressure on the rental sector is set to continue as the growth in new rental homes becoming available has been outpaced by rising demand from would-be tenants in every quarter since spring 2009, RICS said.
Around six out of 10 people living in the private rental sector are thought to be would-be buyers who are trapped in renting, either because they cannot raise the typical 20% deposit they need to put down or meet lenders' toughened borrowing criteria.
RICS said that surveyors across the country are predicting that rents will rise by 4%. This prediction is higher than a recent survey of landlords by property search website Rightmove, which found that rents are set to rise by around 2% next year on average as they reach the limits of affordability for tenants.
The RICS report said: "Inevitably there is some variation at a regional level but in no case are rents expected to be lower at the end of 2013 than where they currently stand."