The recent gains in UK house prices are likely to prove only a temporary respite before a further steep fall next year, according to Fitch, the global ratings agency.

Fitch warned this morning that it expected UK house prices to fall by about 30 per cent in total from the October 2007 peak, despite three consecutive months of house price growth that has led some to hope for a more sustained recovery.

Prices have now fallen 13 per cent from their peak in 2007, according to Fitch, a rate that has moderated since March. The Halifax house price index rose by 1.6 per cent in September, and by 2.8 per cent in total in the third quarter. The Nationwide index showed that prices have risen by 4.1 per cent since the end of 2008.

Fitch has based its estimates on the likelihood of a return to the long term average for the house price-to-income ratio, which is still high, and warned that there would be a continued negative impact from low wage inflation and increased levels of unemployment.

Brian Coulton, head of global economics at Fitch Ratings, said: "The UK's average house price to income ratio remains significantly higher than the long term average. A 30 per cent fall from the peak of October 2007 would bring this ratio back in line with the long term average. In comparison, the house price declines in the early 1990s saw the average house price to income ratio fall below the long term trend."

The downbeat forecast for house prices belies a more optimistic outlook on the economy, according to Fitch, which expects UK gross domestic product to turn positive in 2010 and continue to grow into 2011. Despite this, it expects unemployment to increase in 2010.

"The drag of rising unemployment and low wage inflation is yet to be significantly reflected in house prices," said Alastair Bigley, head of UK residential mortgage backed securities at Fitch. "Unemployment will peak next year and remain close to that high into 2011. This will inevitably weigh on house prices."

Fitch also said that the recent easing in credit availability may also prove to be temporary. Lower interest rates have helped affordability for mortgage borrowers, and reduced arrears and foreclosure rates. Rising unemployment could trigger deterioration in these indices, it warned.

High loan-to-value mortgages also remain scarce, which is affecting first time buyers. "Although households are reducing debt and increasing savings, the upfront cost of house purchase for first time buyers is likely to stifle housing demand," said Mr Bigley.

Capital Economics, a consultancy, has also recently warned that recent gains in house prices will be reversed, given an artificial boost in prices from a shortage of property for sale. "With unemployment set to rise further and the market still overvalued, in our view, the correction is far from over," it said on Wednesday.