House prices can keep rising, says David Cameron

But in a BBC interview Mr Cameron appeared to downplay concerns about the property market. He insisted that allowing for inflation, houses were still cheaper than seven years ago.

“We have to be careful when we look at the figures,” he said. “We are still seeing house prices in real terms that are 15 per cent off the peak they reached in 2007.

“The most recent forecast I saw was that house prices in real terms would not achieve their previous level until 2017/2018.”

Mr Cameron also defended the Government’s Help to Buy scheme, which gives guarantees for people taking out mortgages of up to £600,000.

Liberal Democrat ministers including Vince Cable, the Business Secretary, have suggested the scheme is helping to inflate the housing market.

However, Mr Cameron said the scheme was delivering positive results. “Help to Buy was not a return to irresponsible lending practices,” he said. “I think [Help to Buy] has made a difference.”

Mr Cameron was speaking on an election campaign tour in Essex, where the Conservatives are facing a challenge from the UK Independence Party for the support of working-class voters.

The Prime Minister used the visit to accuse Nigel Farage of trying to “frighten” voters about immigration. Mr Farage said last week people felt uncomfortable about living next to Romanian migrants

Mr Cameron said: “Farage has said pretty appalling things and he has not had to very publicly eat his words. Some of the messages they have been making are about trying to frighten people.”

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