(Bloomberg) -- U.K. house prices rebounded in July as pent up demand helped support the market, according to Nationwide Building Society, which said the government’s stamp-duty cut will likely help boost value in the near term.

Values rose 1.5% from a year earlier to an average of 220,936 pounds ($290,000), the mortgage lender said Friday. That reversed an annual decline in June that was the first since 2012. On a monthly basis, prices rose 1.7%.

“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,’ said Robert Gardner, Nationwide’s chief economist. “The rebound in activity reflects a number of factors. Pent up demand is coming through, where decisions taken to move before lockdown are progressing.”

The housing market, which was all but shuttered for weeks during the nation’s lockdown, had been starting to show signs of strain, prompting Chancellor of the Exchequer Rishi Sunak’s decision to temporarily waive the tax on the first 500,000 pounds of any property purchase.

Nationwide said that could help bring some purchases forward, but cautioned against being overly optimistic, with the prospects of rising unemployment and the increasing unwillingness of lenders to take on risk, potentially acting as headwinds to future growth.

“There is a risk this proves to be something of a false dawn,” Gardner said. “Most forecasters expect labor market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again.”

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