Homeowners across the UK expect their home to increase in value over the next 12 months with those in Wales more positive in July than the previous month, according to a survey conducted by Knight Frank and Markit.

Of the 1.500 households surveyed, 19.8% believed that the value of their homes climbed in July 2013, for the fourth consecutive month, whilst only 6.3% thought they had decreased.

Gráinne Gilmore, head of UK residential research at Knight Frank, said: “There is no doubt that confidence has returned to the UK housing market in some measure. This can be attributed not only to the ‘Help to Buy’ effect as well as signs of a strengthening economy coupled with expectations that interest rates will remain at record-low levels for several years yet.

“Mortgage borrowers are the most confident that prices will rise this year, and this optimism will no doubt be underpinned by expectations of even more affordable borrowing as mortgage lenders continue to cut their rates.

“Average UK house prices are still more than 10% lower than the market peak in 2007. After their lacklustre price performance in recent years, values in many areas will need to make significant headway to outstrip inflation and show growth in real terms. But the upbeat sentiment index suggests that the ‘green shoots’ of recovery may be emerging in the housing market.”

Over 65% of households in London reported that the value of their home had risen at the fastest rate over the last month, followed by those in the East of England at 60.8% and the South East 59.4%. Only households in the North West of England perceived that the value of their property had fallen 49.1% during the month.

Londoners are also the most confident that prices will rise over the next year, with a reading of 78%, the highest reading since the index began in February 2009. They are closely followed by those in the South East at 75.5%, where households are also more optimistic than at any time since the series started.

Tim Moore, senior economist at Markit, said: "July’s house price sentiment survey is the first indication that strong rises in property values have continued into the second half of 2013. A heady mix of improved household credit availability, low mortgage rates and government incentive schemes has brought house price expectations to their strongest level for three-and-a-half years.

“Overall, the latest survey is another clear indication that the wheels of the property market have been well and truly greased, and this is likely to become increasingly clear in the ‘hard data’ for UK house prices during the months ahead.”