City bonuses to boost housing

“Up to 3,000 bankers and brokers will each earn around £1 million from bonuses this winter, mainly as a result of last year’s recovery in mergers and acquisitions and the healthy state of the stock market,” said UCB home loans managing director, Keith Astill. “We are expecting around half of this to be spent on property over the spring period, mirroring a pattern established in preceding years.”

Research by the Centre for Economics and Business research (CEBR) estimates that bonuses in the City of London are likely to total some £7.5 billion this winter, up 16.2 per cent from the £6.4 billion paid during the same period last year.

While the average bonus is likely to be in the region of £23,000 it is expected that 3,000 people will receive £1 million or more, whilst several dozen will receive over £3 million.

“The bonus period has traditionally had a stimulating effect on the housing market, particularly in prime areas of London,” said Astill. “House prices over the £1 million mark are especially likely to receive a boost from the influx of bonus money, and we are also expecting a proportion of the funds to be invested in properties at the cheaper end of the market, within and outside London, with a view to their potential as rental properties.”