UK house prices saw their biggest rise in 11 years this month as the property market bounced back quicker than expected with the easing of lockdown restrictions.
<p>However, economists have cautioned reading too much into the increase in terms of the economic recovery, warning it may prove "a false dawn" as the fallout of the <strong><a href="https://news.sky.com/topic/coronavirus-8483" target="_blank">coronavirus </a></strong>pandemic makes itself felt on jobs and temporary support measures end.</p><p>Prices were up by 1.7% in July, according to a closely watched survey - the largest monthly hike since August 2009, when the market was recovering from the financial crisis.</p><p>The Nationwide Building Society said the average price of a home sold in the last month was £220,936, up from £216,403 in June.</p><p>The mortgage lender said it expected price gains to continue in the short term, helped by <strong><a href="https://news.sky.com/story/coronavirus-chancellor-rishi-sunak-reveals-stamp-duty-cut-and-jobs-bonus-scheme-12024027" target="_blank">a temporary cut in stamp duty</a></strong>, which Chancellor <strong><a href="https://news.sky.com/topic/rishi-sunak-8527" target="_blank">Rishi Sunak</a></strong> announced to help what he saw as an ailing market.</p><p>Nationwide's chief economist Robert Gardner said: "The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions."</p><p>But he also said the pandemic itself might be influencing people's behaviour.</p> <p>In May, a survey by the building society showed that around 15% of people were thinking of moving as a result of lifestyle changes caused by the <strong><a href="https://news.sky.com/topic/covid-19-8518" target="_blank">COVID-19</a></strong> crisis.</p><p>But Mr Gardner warned homeowners not to assume the market had recovered based on one month's results.</p><p>He said: "There is a risk this proves to be something of a false dawn.</p><p>"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.</p><p>"If this comes to pass, it would likely dampen housing activity once again in the quarters ahead."</p> <p>Guy Harrington, the chief executive of property lender Glenhawk, said: "The UK housing market is in a honeymoon phase: post-lockdown, with sentiment boosted as both banks remain desperate to lend and by government stamp duty and Help to Buy proposals.</p><p>"The reality is very different.</p><p>"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 undo all the gains seen in recent months.</p><p>"If you think we've seen the worst, 2021 may just top it."</p>