Housing demand picked up in July as the government’s stamp duty holiday encouraged buyers to purchase early but some estate agents have raised fears that this could end up as a boom followed by a bust, according to the Royal Institution of Chartered Surveyors.

Some 75% of estate agents said they had seen an increase in demand in July with new instructions rising for a second month.

Meanwhile, prices rose for the first time in March with the one exception being London where prices dropped. Agreed sales also rose and are expected to grow over the next three months.

Simon Rubinsohn, RICS’ chief economist, said: “The strong impetus provided to the housing market is evident both in the results of the RICS survey and many of the anecdotal comments from respondents.

“However, 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.”

Tomer Aboody, director of property lender MT Finance, added: “With the stamp duty holiday in place at least until March and hopefully longer, this should help support the housing market to a degree.

“No doubt there will be some negativity and a potential fall in confidence after government schemes such as furlough have ended but a possible downward trend should be eased by banks already preparing a loss buffer (HSBC), allowing them to work more closely with borrowers who might be struggling with repayments.

“Those areas particularly hard hit are likely to be the top end of the market in the £5m-plus bracket for both houses and new-build flats, which are typically bought by investors from overseas who are looking for a central London holiday home or rental investment.

“With more people considering working from home more often, locations both in and out of London with a village feel, near green spaces, should hold strong and values could well increase.

“No doubt there will be challenges ahead but hopefully with debt remaining cheap, lenders could be more flexible, taking into consideration rates, LTVs, deposits and earnings, and getting back to old-school bespoke lending, rather than a tick-box exercise.”