LONDON (Reuters) - Britain was one of the few European countries to record a rise in house prices in 2009 according to a new report, giving further impetus to signs of a sustained recovery in 2010.

The RICS European Housing Review 2010 show that UK house prices rose by 1 percent in 2009, among only five countries to record growth, with the Nordic countries storming ahead with gains as high as 12 percent in Norway.

Ireland, Spain and the central and eastern European countries experienced the worst declines with prices sinking between 27 percent and 53 percent, with little signs of a more positive outlook this year.

The report's author added that the level of supply overhang in Spain, Cyprus and Ireland, including both unsold holiday homes and primary residences, could bring these markets further problems.

The rest of Europe reported only moderate drops given low interest rate environments and a raft of government measures to prop up the ailing residential sectors.

The overall macro economic picture remains uncertain with weak growth across Europe. Total euro zone gross domestic product came in just 0.1 percent higher in the fourth quarter, knocking signs of a pre-recession recovery.

Rising unemployment levels are also forecast to hit the housing market.

BOUYANT UK BUILDERS

Low interest rates and tight housing supply are expected to prop up house prices in the UK this year, with prices leaping 10 percent in 2009 from their lowest point in April.

"The UK economy stayed in recession longer than any other major economy but some degree of growth is expected in 2010," said the report.

The chief executive of Hedge fund Toscafund, Martin Hughes, predicts the UK-focused housebuilders will perform well in 2010 given pent-up demand and the likelihood of a rise in the number of mortgages available this year.

"We think housebuilders will have a very good year, (it's) pointing to improved margins, improved volumes and improved pricing," said Hughes, the high-profile founder of Toscafund speaking at the Hedge Fund & Private Equity Summit.

House prices lost nearly a fifth of their value in the UK from peak to trough.

However the latest housing market surveys point to a steady recovery in house prices though the key figure of mortgage approvals dipped in January, after bad weather and the end of a stamp duty holiday hit numbers.

The UK's largest housebuilder by market value, Persimmon (PSN.L: Quote, Profile, Research), cheered the sector on Tuesday after swinging to a full-year pretax profit, following a 75 million pound write-back and lower debt. The group's chief executive Mike Farley pointed to a strong start to the year with the underlying housing market performing relatively well.

(Reporting by Lorraine Turner; Editing by Jon Loades-Carter)

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