This is expected to push transactions back above one million by 2016 compared with pre-crisis levels of 1.2m.

The property firm predicts transactions of 734,000 this year will rise to 1.1m by 2018.

Fionnuala Earley, research director at Hamptons International said: “The fixation with house prices as an indicator of housing market recovery is misplaced. Transaction levels are a far superior indicator of housing market health. A liquid and active market is the key to avoiding volatility and to ensuring a stable and sustainable housing market in the UK.”

Improved confidence will be built on economic recovery and Government stimuli such as Help to Buy and Funding for Lending, according to the forecast.

In turn, house prices in England and Wales are forecast to increase by 6% in 2014 and by 24% in the next five years. House prices in central London will grow most strongly in 2014 at 8% and by 32% over five years.

House price growth will slow in Prime Central London (PCL) to 3% in 2014 but extreme supply shortages mean that over the next five years PCL could still see 20% growth.

The research suggests while we have been operating in a half-market – with activity at just over half of 2008 levels – transactions are on the increase.

The new build sector will support transaction levels but with only about 10% of transactions are coming from new build completions, with returning sellers driving the majority of the uplift.

Earley said: “Concentrating on house prices alone gives a misguided picture of housing market health. A liquid and active market is the key to ensuring a stable and sustainable housing market in the UK.

“But it will take a long time before they return to levels we became accustomed to five years ago. Households are still stretched and as prices increase, affordability will bite too.”