According to building society Nationwide’s latest house price index, property prices increased by 1.7% during July, following a 1.6% decline the previous month. 

Nationwide’s chief economist Robert Gardner said the rebound represents the “unexpectedly rapid” pick up in activity, since lockdown restrictions were lifted in the UK. 

Gardner cited an uptick in demand ever since the property market had been frozen as the main reason for the sudden increase in property prices, together with lockdown-led behaviour shifts among consumers, with many reevaluating their housing needs and choices. 

With most experts expecting labour market activity to weaken as furlough and mortgage holidays near their end, more layoffs will likely occur. 

Gardner added that: “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.”

However, Hansen Lu, property economist at Capital Economics said that the rebound in property prices seen during the month of July reflected mostly good news for Britain’s housing market. 

“Along with the pickup in lending in June, this reinforces our view that a house price crash is now unlikely,” he said

“Although, with the mortgage holiday and furlough schemes due to end soon, further modest price falls may still be on the horizon.”