European shares edge higher, Britain's FTSE hits new peak

* Britain's FTSE 100 hits new record high

* Housebuilders and miners support the index

* STOXX Europe 600 index ends flat (Adds detail, updates prices at close)

By Kit Rees and Atul Prakash

LONDON, Jan 5 (Reuters) - European shares hovered nearrecent highs on Thursday, with Britain's top equity indexhitting a new peak following a rally in housebuilders andminers.

The pan-European STOXX 600 index, which climbed toa one-year high earlier this week, was up 0.1 percent at theclose, while Britain's blue-chip FTSE 100 was also up0.1 percent after reaching an all-time high of 7,211.96 points.

Persimmon rose 7.2 percent after Britain'ssecond-biggest housebuilder by volume said sales had risen 15percent since Britons voted in June to leave the European Union.It posted an 8 percent rise in 2016 revenue and said profits forthe year would be at the top end of expectations.

"With solid increases in average selling prices and legalcompletions, Persimmon's growth continues despite theuncertainty around the UK's impending exit from the EU," saidGeorge Salmon, analyst at Hargreaves Lansdown.

"With a healthy balance sheet, demand outstripping supplyand no sign of borrowing costs rising in the foreseeable future,Persimmon looks in a strong position."

Other property-related stocks also rose, with Taylor Wimpey up 5 percent.

The market was also supported by miners. Precious metalsminers Fresnillo, Randgold Resources andCentamin were 4.5 to 6.4 percent higher after goldtouched its highest in four weeks on a weaker dollar.

Newly merged Italian bank Banco BPM advancednearly 4 percent, outperforming a 0.7 percent increase inItaly's banking index and bringing total gains sincethe stock first started trading to more than 20 percent.

Shares in Banco BPM debuted on Jan. 2 and around 7 percentof the new bank's capital changed hands this week amid growingdemand for riskier assets and indications from analysts thelender may beat targets set under its business plan.

European insurers came under pressure following a note fromJP Morgan.

The European insurance index fell 0.8 percent,pressured by Hannover Rueck, which fell 2.9 percentafter JP Morgan cut its price target for the stock and RSAInsurance, which fell as much as 2.2 percent after theinvestment bank downgraded it to "neutral" from "overweight".

"RSA was one of the best performing stocks in the Insurancesector in 2016 ... Since it has now reached our 585p targetprice, we move to Neutral. Our EPS estimates are essentiallyunchanged," JP Morgan analysts said in a note.

The worst performer across the benchmark STOXX 600 index wasFinnish oil refiner Neste Oyj, which dropped 5.6percent after a bearish note from Morgan Stanley. (Reporting by Kit Rees and Atul Prakash; editing by JohnStonestreet)