House prices increased by two percent last month – the highest rise for 16 years – according to new figures released by Swindon-based mortgage lender Nationwide.
The building society said the year-on-year increase was running at 3.7 percent, pushing the average price of a house to £224,123 from £220,935.
“The bounce-back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” explained Robert Gardner, chief economist at Nationwide.
“Pent up demand is coming through where decisions taken to move before lockdown are progressing.”
“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown."
“Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of lockdown.”
However, there are concerns within the industry that the bubble will burst once the stamp duty holiday comes to an end.
The Government has removed the stamp duty charge on all properties valued below £500,000 until April 2021.
The end of furlough in October – and the likelihood of hundreds of thousands of workers losing their jobs – is also expected to have a negative impact.