Average house price to reach 300,000 pounds by 2012

LONDON (Reuters) - House prices could rise by 40 percent during the next five years to an average 300,000 pounds because of a shortage of land on which to build new properties, a housing group said on Monday.

The National Housing Federation, which represents non-profit housing associations, warned that young first-time buyers will be unable to get on the property ladder because prices will shoot up across England.

"Our projections show that it isn't going to get any easier to buy a house in this country," the federation's chief executive David Orr told BBC radio.

"House prices will break the 300,000 pound barrier by 2012.

"At root the problem is a lack of supply. We do not have enough homes in the market to be able to accommodate everyone who needs a home. And therefore the price continues to go up.

"We will not be able to house our children -- that is the consequence."

He said the government's plan to build three million new homes was the "minimum requirement".

"We have to have at least 70,000 new homes a year for affordable homes," he said.

Orr called for a rapid increase in the availability of public sector land for development, increased government funding for social housing and faster planning processes.