The property market mini-boom could go bust as job losses soar after furlough ends, Rics estate agents warn

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The stamp duty holiday is already contributing to lift demand for homes, but the mini boom in the market could be followed by a bust, according to a new survey. 

The Royal Institution of Chartered Surveyors said property professionals have warned the recovery may be short lived, as unemployment kicks in and the stamp duty holiday ends. 

One chartered surveyor said the current situation reminded him of the summer of 1988, which preceded the property crash in 1989, when prices crashed as interest rates, inflation and unemployment spiralled. 

Heading for boom and bust? Rics says surveyors are concerned about the economic situation once the furlough scheme ends  in October

Michael David Jones said: 'I believe with 43 years experience as a Chartered Surveyor and having now lived/worked through four boom/bust cycles that the residential market post lockdown is showing significant indications of overheating locally rather like in the summer of 1988.'    

The Government last month introduced a stamp duty holiday, that means buyers pay no tax on the first £500,000 of any property purchase until April next year, when the holiday will come to an end.

This will save those buying the most expensive homes costing £500,000 or more a maximum of £15,000 and lift all those paying less than that out of the property moving tax net altogether.

Rics said anecdotal evidence suggests the stamp duty holiday was already 'playing a significant role in lifting demand', with more agents seeing an increase in both new buyers and new homes being put up for sale last month.

Surveyor expect sales to pick up over the next three months but to tail off next year, as they are concerned about the economic situation following the end of the furlough scheme in October

More agents also saw a rise in sales last month, suggesting that transactions are continuing to jump back after having effectively ground to a halt during lockdown.  

Rics say surveyors are expecting sales to continue to pick up over the next three months, but to tail off in a year's time, as they are concerned about the economic situation following the end of the furlough scheme in October. 

Rics chief economist Simon Rubinsohn said: 'It is interesting that there remains rather more caution about the medium-term outlook, with the macro environment, job losses and the ending or tapering of government support measures for the sector expected to take their toll.

'Significantly, some contributors are now even referencing the possibility of a boom followed by a bust.'

The warning comes as the UK has officially entered a recession, following the biggest quarterly GDP fall on record. And most economists say it will take years before the economy regains the size it had before the crisis.     

Rics' survey found that house prices lifted in July in most parts of the UK, with London being the exception as values there were reported as continuing to fall.  

The outlook for house prices in a year's time is 'marginally positive', the report said. 

House prices lifted in July in most parts of the UK, with London being the exception as values there were reported as continuing to fall

Halifax last week reported that average UK house prices rose 3.8 per cent in the year to July to hit a new record high of £241,604. 

Rics also said agents were beginning to notice a growing interest for lockdown-proof properties that offer access to green space or gardens.

Chris Stonock of Your Move estate agents for Tyne and Wear and County Durham said: 'Record buyer registrations and viewing numbers produced an exceptional sales month. 

'Strong demand across most sectors of the market. Family homes particularly in demand with mounting evidence that outside space is increasingly important.'