LONDON (Reuters) -British house prices rose faster than expected in December to record their biggest annual increase in six years, as tax incentives and COVID-driven appetite for larger homes continued to boost demand, mortgage lender Nationwide said. House prices rose by 0.8% in December alone, barely slowing from the 0.9% recorded in November, and were 7.3% higher than a year earlier, well above forecasts in a Reuters poll for a 6.7% rise. After a collapse in house purchases during the first months of lockdown, there has been a surge in demand to move house, driven in part by a temporary exemption of property purchase taxes which will expire at the end of March. Nationwide said the strength of the housing market contrasted with weakness in some other parts of the economy - especially those exposed to renewed COVID-19 restrictions - and said the outlook for prices in 2021 was highly uncertain. “Housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March,” Nationwide economist Robert Gardner said. So far furlough payments and similar support for the self-employed had limited the impact of a historic 26% fall in economic output on the housing market, against most economists’ earlier expectations, he added. Demand for detached homes had risen most, with an average rise of just over 8% in the past 12 months, while prices for flats had risen by 4%.