Confidence in housing market still strong

Almost two thirds of Britons believe that the housing market will continue to rise in value despite the recent cooling of the market, new research has shown.

The Association of Investment Companies (AIC) has found that 62 per cent of the general public are still confident in the market, though 21 per cent believe that a fall in value, stagnation or even crash could be forthcoming.

However, the AIC has said that this confidence could be misplaced if current trends continue and has urged caution.

"The general public and active investors' optimism in the housing market could well be misplaced as there is increasing evidence that the housing market is slowing down following five rate rises and the recent credit crunch," commented AIC communications director Annabel Brodie-Smith.

"This research demonstrates that the rate rises are already beginning to hit people's finances and could well undermine future confidence," Ms Brodie-Smith added.

This week the International Monetary Fund has also warned of a imminent correction in the UK housing market.

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