The UK is not about to suffer a full-blown recession and the outlook for the housing market is not too bad either.

That is according to a new study by the Intermediary Mortgages Lenders Association (IMLA).

It found that 46 per cent of mortgage lenders and intermediaries believe that house prices will either stagnate or rise in 2008.

Further to this, the majority of respondents said that they think the Bank of England will continue to cut interest rates in the coming months.

Most said that they expect to see interest rates fall to 4.75 per cent, while one forecast that they would plunge to 4.25 per cent.

Commenting on the results, IMLA executive director Peter Williams said that things are heading in the right direction.

"We are in a phase of readjustment in the markets, but that doesn''t mean we''re heading for a house price collapse or a recession," he said.

"We need to see more liquidity in the money markets, and the Bank of England''s action in cutting Base Rate and in providing the £50 billion swap facility is a good start," added Mr Williams.