Shortage of homes will prevent any big falls in house prices next year

House prices are set to drop by 2% next year, but a shortage of homes on the market should prevent bigger price falls.

Prices are likely to stabilise in the first half of 2011 due to the limited availability of properties, said RICS.

But sales are expected to remain sluggish as prospective homebuyers continue to find mortgage finance hard to come by.

RICS estimates 900,000 homes will change hands over the course of 2011, unchanged from this year.

The number of repossessions is expected to fall marginally from 36,000 to 33,000 as claims issued against homeowners continue to fall.