Oct. 7 (Bloomberg) -- Gains in U.K. house prices in the past few months will soon be reversed as rising unemployment curbs demand for homes, Fitch Ratings said.

Nationwide Building Society reported last week that property prices rose for a fifth month in September, erasing losses of the past year. Prices are still down 13 percent from the October 2007 peak, and Fitch expects the level of the drop to extend to 30 percent.

“The drag of rising unemployment and low wage inflation is yet to be significantly reflected in house prices,” said Alastair Bigley, an analyst at Fitch. “Unemployment will peak next year and remain close to that high in 2011; this will inevitably weigh on house prices.”

Britain is struggling to emerge from its worst recession in at least a generation, which has driven joblessness to the highest since 1995. Bank of England policy makers will tomorrow probably maintain its program to purchase 175 billion pounds ($278 billion) with newly created money, according to a Bloomberg News survey of economists.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

Last Updated: October 7, 2009 06:55 EDT