The Council of Mortgage Lenders is forecasting a good year for the property market, with the rise in house prices slowing to a steady 6 per cent by the end of this year.
The CML thinks this will continue at a similar level until 2003, with average house price rises of 6 per cent next year followed by increases of 5 per cent a year in 2002 and 2003.
Its predictions are based on a positive outlook for the economy and steady interest rates.
The CML says this will guarantee that house prices do not rise and fall massively.
The trade body believes a growth in household income and continuing consumer confidence will keep the rate of house price rises at around 3 per cent above inflation.
The CML says it expects the number of house sales will remain level at just more than 1.4 million a year.
Gross mortgage advances are expected to rise steadily to £122bn in 2001 from £117bn last year.
CML director general Michael Coogan says: “The stable outlook for the economy and interest rates is helping to remove the old boom and bust cycle from the housing market.
“The prospects for stability in the economy, interest rates and the housing market are helping homebuyers to look to the future with more certainty than in the past.
“Consumers are benefiting not only from persistent low interest rates but from competitiveness in the mortgage market.”