According to a UK Housing Market Report published this month by investment consultants DGCAssetManagement.com, today’s historically low Bank Base Rate of 0.5% should not increase for a couple of years at least.

However, it argues that he cost of owning a home could rise anyway.

“There’s much debate about when UK rates will rise,” said David Garner, author of the report.

“Mark Carney [Governor of the Bank of England] has said that, barring any sudden jump in inflation, rates will not rise before unemployment dips to 7%, which should ensure some stability for the foreseeable future.

“The question then is when that is likely to happen, and most analysts are saying sometime between 2015 and 2016.”

However, even in a low interest rate environment, housing is likely to become less affordable. The Economic Research Council’s price-to-earnings ratio of UK housing has worsened in the past year and the DGC report forecasts that the negative curve will continue if wages fail to keep pace with house prices.

“In London and the South East of England, the phenomenon of rising prices is making house buying less affordable – especially when factoring in static wage growth and a rising cost of living. If these trends continue then this will likely exacerbate the problem of affordability. The risk is that the implementation of further government subsidies will spread the issue nationwide if house prices are left to rise unchecked.”

According to the report the overall outlook for the UK housing market is positive: it predicts that house prices will rise by 4% every year until 2016, and that mortgage rates will continue to fall further. However, unless wages rise to meet house prices, affordability will become a growing problem.

“We are starting to see signs of consistency in the current economic upturn, which is great. However, it is a two-edged sword because economic stimulus such as QE and low rates are gradually withdrawn, living costs will rise. We can only hope that the recovery picks up sufficient pace as to ensure families are earning more to offset this,” said Garner.