British house prices rose by a stronger than expected 1% in December from November, capping the biggest full-year rise in prices since 2006, figures from mortgage lender Nationwide showed today.

Economists polled by Reuters had expected prices to rise by a monthly 0.5%.

UK house prices this month were 10.4% higher than in December 2020 and the average price of a property stood at record high of £254,822.

Britain's housing market rebounded strongly after the first coronavirus lockdown in 2020 and has powered ahead since then, helped by a now-lapsed tax break for buyers and by ongoing demand for bigger properties as more people work from home.

"It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax," Robert Gardner, Nationwide's chief economist, said.

But the outlook remained extremely uncertain, he said.

"The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth," Gardner said.

"Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term," he added.