By Elizabeth Howcroft
LONDON (Reuters) - British house prices rose at the fastest pace in nearly three years last month, according to a closely watched survey that adds to signs of a rebound in consumer sentiment since December's election lifted some Brexit uncertainty.
The Royal Institution of Chartered Surveyors' (RICS) monthly house price index surged to +17 in January from -2 in December, its highest reading since May 2017 and above all forecasts from economists in a Reuters poll.
The growth was driven by a turnaround in London and southeast England, which had previously underperformed due to higher property purchase taxes and the prospect of Britain leaving the European Union in a disorderly way.
For the first time since February 2016, a majority of surveyors said prices in London were going up.
"It remains to be seen how long this newfound market momentum is sustained for, and political uncertainty may resurface towards the end of the year. But at this point in time contributors are optimistic," RICS chief economist, Simon Rubinsohn, said.
More widespread price rises were matched by an increase in the number of properties being listed for sale, which rose at the fastest rate since August 2013.
For the year ahead, there was the broadest expectation of price rises since January 2016.
Britain left the EU on Jan. 31 and is now in a no-change transition period until the end of 2020, after which trade with the EU will face border checks and potentially tariffs as well.
But the end of uncertainty over when Britain would leave the EU, and of the risk of a sharp leftward shift in government policy under defeated Labour leader Jeremy Corbyn, has lifted sentiment since Dec. 12's election.
Mortgage lender Halifax reported a 4.1% annual rise in house prices in January, the biggest increase since February 2018, and the Bank of England said lenders approved the most new mortgages since July 2017. [nAPN0AZGYL] [nBELVCEG8N]
At the end of January, the BoE kept interest rates steady because it saw signs of a pick-up in growth. [nL8N29Z4VJ] [nL8N29L2FX]