Prices are projected to be broadly flat in 2011 and to recover only gradually after that, but there is a widening band of uncertainty around these longer-term projections.
John Hawksworth, head of macroeconomics at PricewaterhouseCoopers LLP, said: "Although the estimated average UK house price overvaluation of around 25% in mid-2007 has now been largely eliminated, our analysis suggests that house prices could still have further to fall over the next year.
"Despite some recent reports of rises, we are not out of the woods yet by any means. It is important for buyers to take a long-term rather than a short-term view."
Analysis in the report suggests that it is more likely than not that real house prices in 2015 could still be below 2008 average levels, after adjusting for general consumer price inflation.
Even in 2020, after five years of relatively strong growth, there is estimated to be a 30% chance that real house prices could still be below 2008 levels, although this is very unlikely to be the case in cash terms.
Hawksworth said: "The pace of recovery in house prices seems likely to be relatively modest until the middle of the next decade, although it could pick up again beyond that as supply shortages reassert themselves, credit conditions return to normal and negative memories of the current housing bust fade."
Have your say on this story using the comment section below