BRITONS remain confident in the housing market with nearly two-thirds of people expecting prices to continue increasing, research has shown.

Around 62 per cent of people said they thought the property market would continue to rise in value, with just 21 per cent of people predicting it would stagnate, fall in value or even crash, according to the Association of Investment Companies (AIC).

But wealthy consumers who regularly invest money in shares were less confident, with only 44 per cent expecting house prices to continue rising, while 48 per cent think they will stagnate or fall.

People are also feeling the strain from five interest rate rises since August last year, with 30 per cent of people with a buy-to-let property saying their investment was now less profitable, rising to 43 per cent among people who regularly invest in shares.

At the same time 7 per cent of people said they were losing money on property investments either due to falling house prices or because rising interest rates had pushed mortgage repayments above the level of rental income they received.

The majority of consumers are optimistic about the outlook for commercial property, with 55 per cent expecting it to increase in value, although this fell to 37 per cent among active investors in shares.

But despite people's faith in property only 13 per cent of consumers have money invested in property outside of their own home.

The majority of people said they did not invest in property because they could not afford to, with 59 per cent citing this as their reason.

Just over half of people think the UK housing market will be the best performing sector during the coming year, compared with just 15 per cent of people who thought the stock market would outperform property.

Active investors were more cautious with a third expecting stocks and shares to deliver the best returns, compared with just 15 per cent who favoured property.

Communications director at AIC Annabel Brodie-Smith said: "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.

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