HOUSE prices across Britain could rise by more than 10 per cent next year as the economy recovers and banks ramp up mortgage lending, analysts at UBS Wealth Management predicted yesterday.
Banks have cleaned up their balance sheets since the crisis, the analysts said, meaning they are free to increase lending again.
And with super-low interest rates and extra government support for high loan to value lending, they will turn on the taps enthusiastically.
“The modest 3.4 per cent rise so far this year will be dwarfed by a likely double-digit increase during the next year,” said UBS’s Bill O’Neill. “The knock-on effect will be a meaningful contribution to the UK’s GDP, adding to the overall positive picture for the UK economy in 2014.”
He expects the housing recovery to boost GDP by 0.9 per cent over the coming years.
Extra construction will be stimulated by the higher prices and add 0.2 per cent to the economy, while households feeling riches will increase spending, boosting GDP by 0.7 per cent.