Most consumers (over 60%) believe that house prices will continue to rise over the coming year – the highest proportion since the Building Societies Association (BSA) began tracking consumer sentiment back in 2008.
It was also revealed in the BSA's Property Tracker report that one in five consumers feel that the housing market is recovering, with only 1% describing it as 'crashing'.
Additionally, access to mortgage finance was considered a barrier to property purchase by 39% of respondents, down from 46% three months ago and 60% in 2011.
BSA figures also show that increased availability of 90% loan-to-value mortgages is starting to make a significant impact on the market, with a quarter of all mutual lending made to those with a 10% deposit or less in the first seven months of the year.
But the news of increasing consumer confidence comes as worries mount that rising house prices will lead to an artificial house price bubble being created.
Only last week, the Royal Institution of Chartered Surveyors called for the Government to stop house prices rising by more than 5%. It said this could be achieved by placing caps on how much people could borrow relative to their income or the value of the property.
The property website Rightmove, meanwhile, announced it has upped its forecast for house price growth in 2013 from 4.5% to 6%.
"Signs of recovery in the market have been much discussed over the summer and these Property Tracker results confirm an improved outlook," said Adrian Coles, director-general of the BSA.
"We are however, still clearly in recovery mode; and the cautious words of those who have been sounding warnings about a market already at risk of overheating need to be listened to, but it would be wrong to take any steps at this point that might damage the recovery in its early stages."
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