Improved economic conditions should see intermediaries prosper in the coming months, according to Laurence Sanders, economist for Bristol & West .
Addressing delegates at The Mortgage Event in Glasgow last week, he said he expected the economy to take an upward turn in the next six to nine months, before a period of sustained recovery and the return of the feel-good factor kicked in.
Sanders said stability had characterised recent years, in terms of inflation, interest rates and economic growth, and the country had moved away from excessive bouts of boom and bust.
Following the UK’s exit from the European Monetary Exchange 10 years ago, and the huge base rate fluctuations seen at that time, he said the UK had enjoyed base rates of 7.5% and under for the last nine years.
This coupled with low inflation, low unemployment and increased average wages, would see the housing market continue to prosper.
Sanders forecast the base rate would rise to 5.75% by the end of 2004 before falling back to 5% by the end of 2005.
He added house prices would finish the year up 15% with the rate slowing to 7% and 9% in the next two years.