Optimism is returning to the housing market, new research has revealed.

A survey carried out by Unbiased.co.uk found that 18 per cent of consumers think property prices have now reached their lowest level, with a third of respondents claiming they are now starting to increase.

Just three per cent of those polled said they think values are likely to drop further over the coming year.

When it comes to first-time buyers, the survey revealed that 31 per cent are putting off purchasing a property until they have saved a deposit.

The website's chief executive Karen Barrett commented: "The last year has seen a real shift in the attitudes of consumers towards buying a house. No longer are potential homebuyers biding their time until house prices have fallen."

Meanwhile, it was claimed last month that many mortgage lenders are loosening their purse strings.

According to price comparison site Moneysupermarket.com, the number of 85 per cent loan-to-value (LTV) products available has increased by 22 per cent since December 2009.

Written by Emily Sanders