‘Virtually all parts of the UK are now seeing prices increase’ to some extent, with buyers facing a ‘sharp acceleration’ in prices up and down the country in August, Rics said.
But with the sharp gains coming at the same time as a mortgage crunch and job losses are hitting, it warned that many buyers could be squeezed out of the market.
Meanwhile, some experts say the future outlook for house prices remains uncertain and the mini-boom could unravel once the true economic toll of the pandemic starts to bite later this year.
Broader economic instability is ‘shrouding the future health of the market’, Hugh Wade-Jones, managing Director of Enness Global Mortgages, warned.
The ‘mini-boom’ in property prices also looks set to put further strain on buyers looking for homes in ‘affordable’ price brackets, particularly when it comes to people looking to get on the first rung of the ladder.
Simon Rubinsohn, chief economist at the Rics, said: ‘The latest Rics survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months.
‘More of a concern is the pick-up in prices which could intensify issues around affordability in some parts of the country.’
Mr Wade-Jones of Ennes Global said many buyers looking for a sub-£500,000 home are continuing to ‘beg, borrow and borrow some more’ to try and secure a mortgage and take advantage of the current financial landscape, which includes the axing of stamp duty on homes up to £500,000.
A string of well-known lenders have already axed their highest loan-to-value mortgage deals and many have tightened their lending criteria as a result of the pandemic.
A growing number of lenders also restricting the amount people can borrow to get a home. Barclays has limited loans to just 4.49 times someone’s income, down from five-and-a-half times previously.
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