People's confidence in the strength of the UK's housing market may have peaked, research has revealed.

A study by the Woolwich found a slight fall in the number of people who expected house prices to keep rising.

Recent record rises in house prices have raised fears that the housing market boom could be followed by bust.

But the Woolwich said its survey findings suggested that the property market was set to slow down naturally.

Signs of a slowdown

The survey found that 61% of people questioned in June thought property prices would rise or stay the same over the next 12 months, down slightly from May's 64%.

The Woolwich said it was the first fall since November last year when the property market was still recovering from the effects of 11 September.

But confidence remains high, as in 2001 the proportion of people expecting higher prices averaged 53%.

The Woolwich said that gross mortgage lending had also fallen, with �17.5bn forecast to have been lent last month, against �19.5bn in May.

"Our figures give an indication that confidence in the property market may have reached its peak as both average consumer confidence and UK gross mortgage lending levels have fallen slightly," said Woolwich's head of lending Andy Gray.

"We believe that continuously increasing house prices have started to make property unaffordable for many people, which is causing the housing market to slow of its own accord."

Out of control?

Earlier this month, house price surveys from both the Halifax and the Nationwide building society showed prices rising at an annual rate of nearly 20%.

Mortgage lenders say the surge in prices has been fuelled by low interest rates, rapid income growth and a shortage of suitable properties.

But the rapid price increases have raised fears that the housing market could be heading for a crash, similar to that seen in the early 1990s.