Members also expect the UK to have sluggish GDP growth at 0.91% with expectations ranging from a contraction of 2% to a growth of 1.5%. Inflation is expected to fall materially within a range of 2% and 4%, the average view being that inflation will reduce to 2.79%.
The five year view from IMLA is more optimistic with members expecting base rates to rise to 2.83% and the average price of a UK home to be around £178,300.
Members were also confident that the role of the intermediary would remain important and hold 59% of the first-time buyer market, 60% of the remortgage market, 51% of the home mover market and 82% of the buy-to-let market by 2016.
Peter Williams, executive director at IMLA, said: “The survey results may look negative but represent a realistic outlook for the year ahead and remind us that we are still in very challenging times for the economy.
“The mortgage market remains very limited which is why intermediaries can play such an important role to help inform consumers about the best products available and what is right for them.
“Matching lenders and products to consumers is crucial to ensure sustainable lending and improve the market. “
