A new report says Londoners and those living in the south east are more optimistic about the housing market prospects than a year ago.

The report comes from the Halifax which says confidence in house price prospects is significantly stronger than it was at the beginning of the year.

The majority of those questioned think that any house price change over the next 12 months will be relatively small with two-thirds expecting any movement to be between +5 per cent and –5 per cent. The average UK house price in September 2012 was 0.3 per cent lower than in December 2011, according to the Halifax House Price Index.

Jason Tebb, Your Move’s regional managing director for London backed up the findings saying property in Sutton and Epsom was particularly popular with buyers.

He said: “The numbers of new applicants have remained high in several key desirable locations throughout south west London, most notably in areas which attract a transient population moving from central London areas to the suburbs to find value, space, and quality of life.

“Most notable of these areas has been the commuter friendly hubs of Sutton and Epsom – desirable suburbs with excellent transport links, quality schools and the same shops and amenities as those normally associated with central London postcodes.

“This comparative value in turn drives demand and shortens supply and it is this effect which has led to a return of optimism and confidence in the market.

“These buyers are moving for reasons other than just purely financial, and it is these fundamental life changing moves which fuel the market.

“Prices are remaining stable and in some instances continuing to rise, and the best properties are selling within days, usually at closer to the asking price than had been seen in early 2012.

“The combination of all these factors has meant that buyer sentiment is the highest for some considerable time – sellers should be confident that at least in these south west London areas, their property will attract interest from some quality applicants in good financial positions.”

Martin Ellis, housing economist at Halifax said: “Despite some regional differences, the general improvement in confidence in the outlook for house prices over the past year reflects the relative resilience of the UK housing market.

“Although the weak economic climate remains a significant constraint on housing demand, the low level of mortgage payments relative to income continues to provide support for house prices. We expect house prices to be broadly unchanged over the rest of this year and into 2013.”

More than half of those surveyed said that one of the biggest obstacles to buying a home was raising a deposit (58 per cent) and concerns about job security (51 per cent).

Other obstacles were household finances (32 per cent) and the general availability of mortgages (31 per cent) as other hurdles to home buying.