Britain fared better than any other country in western Europe in the global house price league in 2009, according to a new analysis. The results suggest that the Bank of England's policy of quantitative easing was a short-term success.

However, the warning from the Global House Price Index - estate agents Knight Frank - is that there is a serious risk of Britain falling back in the world league if rate rises are imposed in 2010/11.

The Knight Frank index says that UK prices were rising by 3.4 per cent per year at the end of 2009 - against 27.6 per cent in Hong Kong, 25.1 per cent in mainland China, 21.3 per cent in Israel and 13.6 per cent in Australia.

By contrast, Ireland - which has taken more drastic measures to slash government spending in the past year - saw an 8.3 per cent slide in house prices in the second half of 2009 alone. In the year as a whole, prices slumped 18.5 per cent.

The Bank of England's decision to pump money into the economy and to slash interest rates kept repossessions in Britain down and left us looking stronger than rivals on mainland Europe.

Britain left most of western Europe behind during 2009. While Portugal showed a 0.2 per cent rise for the whole of 2009, there were falls in Germany (1.7 per cent); Greece (3.6 per cent); Italy (4.2 per cent); Spain (6.3 per cent) and France (4.4 per cent). Had the pound held firm too, Britons might have been looking to snap up bargains in European holiday destinations. But Knight Frank says the busiest market for British buyers abroad is actually about £300,000.

Liam Bailey, Knight Frank's head of residential research, said: "The recovery in global housing markets is still somewhat shaky."

The disaster areas for housing markets are in Estonia (down 40 per cent); Dubai (down 42 per cent) and Latvia (down 50 per cent).

Mr Bailey added: "The UK position has been buttressed by the stimulus packages and the low cost of finance. But nobody can guess what resilience the market will show if rates are forced upwards later this year, or perhaps in 2011. There is certainly a clear risk of the market weakening significantly."

KNIGHT FRANK GLOBAL

HOUSE PRICE INDEX

Annual price growth to Q4 2009

1 Hong Kong 27.6 per cent

2 Mainland China 25.1 per cent

3 Israel 21.3 per cent

4 Australia 13.6 per cent

5 Norway 11.6 per cent

6 Finland 7.8 per cent

7 Switzerland 6.9 per cent

8 Colombia 6.7 per cent

9 New Zealand 6.4 per cent

10 Sweden 5.8 per cent

How other countries fared: 12 Canada 5.2 per cent; 14 Jersey 3.6 per cent; 15 United Kingdom 3.4 per cent; 26 Germany -1.7 per cent; 28 USA -3.1 per cent; 29 Greece -3.6 per cent; 33 Spain -6.3 per cent; 41 Ireland -18.5 per cent; 46 Dubai -42.1 per cent