Confidence that house prices will continue to rise has reached a 20-month high according to a new report.

However, more buyers are seeking out properties they can add value to and are looking to haggle on price, according to the latest research from Yorkshire Bank.

It found that 71% of us think house prices will continue to rise this year - the highest level of confidence since April 2004.  Then, 73% thought prices would continue increasing.  A year ago the figure was 55%.

The number of people looking for cheaper properties which they can add value to and immediately gain equity has increased from a fifth 15 months ago to a quarter today.

Spurred perhaps by a slowing market, buyers are more willing to try their luck with a low offer.  More than a fifth (21%) would now make a low offer to start with, only raising it if necessary.  This compares with one in eight who say they would immediately offer above the asking price on a property they liked.

Gary Lumby, Yorkshire Bank's head of retail, said: "Last year the housing market exceeded most people's expectations and it appears the confidence homeowners took from this has carried through to 2007.” 

“Although three Bank of England interest rate rises don't appear to have dented this confidence, the market is less robust.  We need to wait to see how it reacts to January's unexpected rate rise.”

"Buyers who are now looking for properties they can do up are using this uncertainty to their advantage by trying their luck with a lower initial offer - and only raising it if necessary.  Should these offers below the asking price be accepted by sellers then we may see prices levelling off."

Yorkshire Bank's research found that - although confidence in the housing market is high - three-quarters have no plans to move house in 2007.

Furthermore, a third of recent first-time buyers expects to live in their current property for the next 10 to 15 years.  This is well above the average for homeowners generally, which stands at 28%.

Gary Lumby said: "Despite the fact moving house more frequently can help you climb the property ladder more quickly and gain more equity, a lot of buyers - especially those who have just purchased their first home - are looking to stay put for a number of years.”

"This may be because they've either stretched their finances to buy a property or simply do not fancy the stress of moving again.”

"Anyone in this position may wish to take a little extra time finding the perfect property.  It doesn't just need to be right for them now.  Some time in the next 10 to 15 years, they may find themselves starting a family and needing extra rooms.  Or their children may be old enough to leave home.”

"So buyers need to be sure that a property will meet not only their immediate circumstances, but any changing needs they can foresee in the years to come."