House prices jump as the market bounces back but experts fear ‘a false dawn’
HOUSE prices rose by £4,500 in July as the property market recovered faster than expected after the lockdown – but experts warned of a “false dawn”.
Property values were up 1.7 per cent compared to last month, and were 1.5 per cent higher than the same period last year, a survey revealed.
The Nationwide Building Society said that the average price of a home sold in the last month was £220,936, up from £216,403 in June.
But the institution’s chief economist Robert Gardner said that pent-up demand came through in July as the lockdown eased.
He said: “The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”
Sentiment
In May, a survey by the building society found that around 15 per cent of people were contemplating a move because of their new locked-down lives.
But Mr Gardner warned homeowners not to assume the market has recovered just because of one good set of results. He said: “There is a risk this proves to be something of a false dawn.
“Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.
“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”
Guy Harrington, the chief executive of property lender Glenhawk, warned of a dire future for the market, insisting that next year is likely to be a grim one for property.
He said: “The UK housing market is in a honeymoon phase – post-lockdown, with sentiment boosted as banks remain desperate to lend and by government stamp duty and Help to Buy proposals. The reality is very different. The UK is staring down the barrel of a period of unprecedented pain, underpinned by mass unemployment as the furlough scheme ends and a likely second spike, which will hit consumer confidence in unimaginable ways and will undo all the gains seen in recent months.
“If you think we’ve seen worst, 2021 may just top it.” the