Adds reaction from economists, context
LONDON, June 7 (Reuters) - British house prices rose at the fastest annual rate since the start of 2017 during the three months to the end of May, mortgage lender Halifax said on Friday, though it added the figure was flattered by weak growth a year ago.
Halifax said house prices in the three months to May were 5.2% higher than in 2018, up from 5.0% annual growth in the three months to April, their highest since January 2017 and beating a forecast in a Reuters poll of economists.
Britain's housing market has slowed since 2016's Brexit referendum, driven by price falls in London and neighbouring areas, exacerbated by higher purchase taxes on homes costing over 1 million pounds ($1.27 million) and on second homes and small landlords.
Halifax said prices rose 0.5% on the month in May, in contrast to predictions of a fall, and April's monthly house price growth was revised up to 1.2% from 1.1%.
"The overall message is one of stability," Halifax managing director Russell Galley said.
"Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates," he added.
Since the start of this year, Halifax house price data have been consistently stronger than figures from rival mortgage lender Nationwide, which reported annual price growth of just 0.6% in April.
The most recent official data showed house price inflation of 1.4% in the year to March, and Pantheon Macroeconomics economist Samuel Tombs said he expected price growth to remain around this level for the rest of this year..
"Households' real incomes still are rising at a solid rate, while the recent decline in interest rate expectations should reduce mortgage rates soon," he said.
($1 = 0.7868 pounds)
(Reporting by David Milliken; Editing by Alistair Smout)
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