House prices in the UK are predicted to increase by 20% in the next four years, according to the Centre of Economics and Business Research (CEBR).

 Since the banks started to step up lending and interest rates remain low, the Centre of Economics and Business Research (CEBR) predict that UK house prices will increase by 20% in the following four years.

This positive forecast is reviewed based on the continuous improvements in the availability of mortgage finance, stagnant low interest rate at 0.5% and high demand with shortage of supply in properties.

 Furthermore, in October 2009 CEBR expected that house values would result in a 2.6% increase by the end of 2010. Yet in January 2010, this business independent consultancy forecasted a rise of 6.5% by the end of this year. This shows a heightening public confidence within the housing market.

 Other than that, Nationwide Building Society has also revealed a 1.2% monthly increase in property prices for January. This rise of January house prices is resulted as the ninth consecutive monthly increase - illustrating a 8.6% yearly gain - contributed to the average property value of £163,481.

 A CEBR economist, Benjamin Williamson, stated: “The fact that house prices have already risen by almost 10 percent since the bottom of the cycle has surprised most commentators.”

“However, with the rate of mortgage lending more than doubling over this period of time, a shortage of new properties on the market, low interest rates and unemployment not rising nearly as fast as expected, it is easy to see how prices have moved so quickly.”

Get cheap landlord insurance and buy-to-let insurance.