Almost two-thirds of Britons think house prices will continue to rise, according to a survey by the Association of Investment Companies (AIC). Despite the recent warning by the International Monetary Fund (IMF) that the UK market was heavily overvalued and heading for a fall, 62% of the public thought the housing market was still on the way up.

Among investors, confidence in the market was lower, with 44% predicting a continued rise and 48% predicting a stagnant market or a fall, compared with 21% of people generally.

The research found that the five interest rate rises since August 2006 had taken a toll on second-home owners and landlords - some 30% said the value or profitability of their property investments had been hit and 6% said they were already losing money on their second property.

Asked to consider the housing market in the context of other investments, 54% of people said they believed residential property would be the UK’s best performing sector next year, while just 15% said they thought the stock market would perform best.
However, the opposite was true among people with investment portfolios - one-third of them thought the stock market would be the top performer, and just 15% favoured the UK property market.