Biggest rise in house prices for 11 years

1.7% jump in July after home move ban lifted

HOUSE prices rose by 1.7 per cent in July, the biggest monthly increase in 11 years, according to Nationwide.

The lender said the bounce back reflected an ‘unexpectedly rapid recovery’ in the housing market since a ban on home moves was lifted.

It follows a 1.5 per cent fall in prices in June – the first annual dip in eight years.

But analysts warned of a ‘false dawn’ with steep price falls still possible later in the year.

The average house price in the UK increased by £146 per day in July to £220,936, up 1.5 per cent from the same time last year.

But prices are still 1.6 per cent lower than in April.

David Westgate, chief executive at Andrews Property Group, said: ‘Since mid-May, the sheer strength of pent-up demand following lockdown has injected some real energy into the market.’ But Nationwide’s chief economist, Robert Gardner, said the revival went deeper than the release of pent-up demand, with moves triggered by families’ experiences of lockdown.

He added: ‘Behavioural shifts may be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown.’ Mr

Gardner said the upward trend looks set to continue in the short term, fuelled by the stamp duty boost.

But he warned most forecasters still expect the market to suffer when the Government’s furlough scheme ends and unemployment begins to bite.

Jeremy Leaf, a north London estate agent and a former chairman of the Royal Institution of Chartered Surveyors, said the positive data reflected ‘what we are seeing on the ground’.

He added: ‘Activity has been given added impetus by the stamp duty holiday and continued low interest rates.

‘However, concerns remain as to the longer-term prospects for recovery bearing in mind the risk of further Covid spikes and rising unemployment as furlough support falls away.’

Experts said growth could also be restricted by cautious lenders.

A swathe of low-deposit mortgages have already been cut, making it more difficult for first-time buyers to get on the property ladder.

Lenders are also tightening up their criteria for the selfemployed, furloughed workers and those who have taken mortgage holidays.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘Lenders remain keen to lend but also cautious as to borrowers’ financial positions, given the impending end of the furlough scheme and a number of redundancies which have already been announced.’

Last month, the Centre for Economics and Business Research predicted that house prices would fall by 5 per cent this year and a further 10.6 per cent in 2021.

It said it did not expect a return to pre-pandemic levels until 2023.

But estate agents believe that the market can defy the doommongers and earlier forecasts are being proved wrong by the current mini-boom.

Last week, Money Mail reported predictions that prices could now grow by up to 2.5 per cent by the end of the year, although such optimism is not shared across the board.

‘Reassess their housing needs’