Despite figures out today showing house prices still ploughing upward, housing market confidence has been dented in the South for some time, says assertahome.com.

Now growing gloom about prospects for the housing market has begun to spread out across the country as the proportion of pessimists has risen everywhere except Scotland and East Anglia.

The firm's July survey shows a marked decline in house-hunter confidence in the housing market, continuing a trend which has been underway since interest rates began to rise. In July, only 56.9% of house-hunters still expected house prices to rise over the next twelve months. 35% now expect house prices to fall compared to just 9% in January.

A massive 43% of house-hunters in the North now expect house prices to fall as compared to 33% in June. Rate rises have bitten particularly hard in both Wales and Yorkshire & Humberside, where price fall expectations have increased by 18 and 17 percentage points to 33% and 25% respectively.

The Midlands has now also joined the growing list of regions expecting price declines. Londoners have become especially negative with 47% expecting price declines, the highest proportion of pessimists in the country.

In total respondents now expect national house prices to rise just 1% over the next twelve months, in line with June, but down sharply from 6.6% in May.

Jim Buckle, Managing Director of assertahome.com commented: "The MPC has been explicitly targeting house prices this year and has already hit the bullseye. The trouble is they haven’t realised it yet; interest rates are already squeezing the life out of the housing market."

"The main house price indices many of which still show buoyant price increases are well behind the curve and have not yet picked up these dramatic changes in consumer confidence. In terms of the housing market, last Thursday’s rate rise was unnecessary and the MPC should take a ‘wait and see’ approach for the next few months."