Property values are expected to increase over the next six months by 78% of homeowners.

The latest Housing Market Sentiment Survey carried out by property website Zoopla.co.uk reveals that, while still very high, this figure has fallen from 81% three moths ago.

Zoopla attributes the waning confidence level to worries about the availability of mortgages and concerns about job security.

According to the survey, the average respondent expects house prices to grow by 5.5% from current levels by the end of 2010.

However 34% of survey respondents believe that the ongoing mortgage drought still poses the greatest threat to the UK housing market.

Some 27% of respondents think it is more difficult to get hold of a mortgage now than it was three months ago, while 23% believe it is easier.

25% are worried about interest rate rises adversely affecting the housing market recovery, while 21% cite public sector job cuts as potentially damaging.

Nicholas Leeming, commercial director of Zoopla.co.uk, said:

“Confidence among homeowners remains high for the time being, but the dip does signal a directional shift as concerns are building again around the outlook for the property market.

“The fear remains that the revival in the housing market will be derailed unless the banks make a concerted effort to increase lending.

"With job cuts looming in the public sector and interest rate hikes expected at some point, the new Government has its work cut out."