Against the continuous background hum of experts variously predicting imminent boom or bust for the housing market, the past seven years have proved to be nowhere near either extreme. This was demonstrated quite starkly at the end of the final quarter for 2001 when the Paragon Mortgages FACT Index, the quarterly test of mortgage market confidence among professional advisers, completed its seventh year.

Despite the terror attacks on New York and other recessionary factors built into the storm forecasts for the economy, the Financial Advisers Confidence Tracking (FACT) Index scaled its second highest peak to climb to 120.3. This is against the highest for any quarter when 123.9 was reached during the last quarter of 1997.

The leanest point of the last seven years was the winter of 1999/2000, when the Index for Quarter 4 of 1999 dropped to 96.6 and fell even lower for the beginning of the Millennial year, to only 99.00 for the first quarter of 2000.

"Millennium Year obviously did not mean as much to most people as it did to some," recalled John Heron, Managing Director of Paragon Mortgages, the specialist Buy to Let lender. He pointed out that aside from the millennial lack of confidence and a single fourth quarter bout of winter gloom at the end of 1998, confidence among mortgage professionals had been continuous over the period, with a steady upward trend showing over the past 18 months.

"1995 and 1996 saw confidence return to the mortgage market following the recession of the early nineties. Confidence and stability was reinforced by the launch of Buy to Let in 1996, where Paragon Mortgages played a significant role. Since then, the Fact Index and other research has revealed that mortgage advisers have been servicing a stable market aided by highly competitive mortgage products."

The Fourth Quarter FACT Index shows that the upward trend in advisers' expectations is well established. This is partly due to Buy to Let mortgages accounting for 10% of all mortgage business now arranged by advisers.

Overall, the number of mortgages handled by advisers in the run-up to Christmas bucked the seasonal trend to grow by 2% over the traditionally bullish Third Quarter. The 2001 Fourth Quarter figures were 14% higher than a year ago and 17% higher than two years ago.

Base rate tracker mortgages continued to perform strongly, increasing market share from 23% to 27%. Capital and Interest mortgages now account for 71% of the total mortgage market, while endowment mortgages barely exist, taking just 3% of today's market against well over half the market at the height of their popularity in the eighties.

Financial advisers expect to kick off the New Year by arranging 5.4% more mortgage business in the first quarter of the year than they achieved during the last quarter of the old year.