UK monthly house price growth hits nearly 13-year high - Halifax

FILE PHOTO: Houses are seen painted in various colours in a residential street in London, Britain, May 15, 2019. REUTERS/Toby Melville

LONDON (Reuters) - British house prices jumped in December by the most in monthly terms in nearly 13 years but the market is likely to show only a modest recovery, mortgage lender Halifax said on Wednesday.

Prices rose by 1.7% last month from their level in November, the biggest monthly increase since February 2007, and up from a rise of 1.2% in November, Halifax said.

In annual terms, house prices were up 4.0% year-on-year, the biggest such increase since February 2018, after a 2.1% rise in November.

Halifax said its index covered the full month of December, during which Prime Minister Boris Johnson won an emphatic election victory, removing uncertainty about whether Britain will leave the European Union on Jan. 31.

Russell Galley, Halifax’s managing director, said the increased clarity for the economy should lead to higher transaction volumes and further price growth.

“Longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand,” he said.

“As a result, we expect a modest pace of gains to continue into next year.”

Last week, rival mortgage lender Nationwide said its measure of British house prices rose in annual terms by more than 1% for the first time in over 12 months in December.

Writing by William Schomberg; Editing by Alison Williams and Alistair Smout