U.K. house prices probably won't fall this year as the shortage of homes and low interest rates support the property market, the Royal Institution of Chartered Surveyors said.

'With housing supply continuing to be tight and interest rates likely to remain low, it seems unlikely that prices will dip again', the London-based lobby group said in a statement. 'Activity will still be constrained, so that recovery will continue to be slow, particularly outside of London and the southeast'.

The report contrasts with Bank of England policy maker Kate Barker's comments last week that there may be further 'adjustments' in the housing market as banks curb lending. Almost nine out of 10 Britons say buying a home is a 'sensible investment' even after the U.K.'s worst housing slump in three decades, a survey by YouGov Plc published today showed.

'The recovery figures for the last nine months of 2009 indicate as much the scale of the market collapse which occurred between autumn 2007 and spring 2009 that any true recovery in market activity,' RICS said.

Today's report, a review of European real estate in the past year, said that the continent's worst-performing markets form a 'horseshoe shape' from Ireland, through Spain, Greece and central and Eastern Europe.

'The level of supply overhang in Spain, Cyprus and Ireland, including both unsold holiday home and primary residences, could bring these markets further problems,' RICS said.

Hungary's housing market will probably also post declines this year, while prices in Poland are more likely to recover, the report said.

'Huge problems remain,' Michael Ball, an author of the report, said in a statement. 'Housing markets around the fringe of Europe are still dragging down economies in a vicious circle and all European housing markets continue to face credit constraints and great uncertainty.'

By Scott Hamilton, Bloomberg