This Friday marks the end of the longest depression in British economic history, it has been revealed.
Official figures will confirm that the total amount produced by Britain – or Growth Domestic Product – exceeds the level last seen before the recession hit.
Government figures show GDP fell by 7.2 per cent between its height during the first three months of 2008 and its low in the second quarter of 2009.
Technically, a depression – defined as a long or deep recession – does not end until GDP exceeds this pre-recession peak.
Britain’s economic recovery has been slow. National output during the first quarter of this year was still 0.6 per cent below that peak, according to the Office for National Statistics.
But momentum has picked up significantly during the past year and Britain now has one of the fastest growing economies among wealthy countries in the world.
This confidence is already being felt in the property market. Latest research by Zoopla shows the average value of a home soared by £90 a day during the first half of this year, leaving the typical property costing £260,488.
But experts warn that while the economy is improving, there are other issues – such as the forthcoming General Election – that are influencing the performance of the house market.
Mark Harris, of mortgage brokers SPF Private Clients, said: “The official numbers are demonstrating what the housing market has known for some time – the worst is over for the economy. Confidence is returning, with many of the buyers who may have been worried about job security and delayed making a purchase, finally ready to take the plunge.
“However, while the recovery is welcome it is also tentative. There are signs that the housing market is now starting to cool a little with buyers better able to negotiate over prices than before. With the threat of an interest rate rise on the horizon and the uncertainty surrounding the General Election, along with the possibility of a mansion tax, there are plenty of hurdles for the housing market to overcome.”
The average cost of a home soared by £90 a day during the first half of 2014, research showed today.
House prices in Britain jumped by 6.5 per cent or £16,265 in the six months to the end of June, to leave the typical property costing £260,488, according to Zoopla.
Home values rose in all regions of Britain during the six months, with London leading the way with an increase of 8.2 per cent or £43,115.
The steep gain pushed the average house price in the capital up to £567,392.
But the East and South East were not far behind posting growth of 7.5 per cent or £19,440, and 7.4 per cent or £23,031 respectively.
The Zoopla research came as data showed the number of homes changing hands reached a six-and-a-half year high during June.
A total of 109,580 properties were sold for more than £40,000 during the month on a non-seasonally adjusted basis, according to HM Revenue & Customs.
The figure was the joint-highest number of homes to change hands since November 2007.
But on a seasonally adjusted basis, the property market showed some signs of moderating, with 102,680 residential properties sold during June, broadly unchanged from the previous two months.
The Zoopla data also provided further evidence that the housing market recovery is beginning to ripple out from London and the South East to other areas of the country.
Salford in Greater Manchester was the best performing town during the first half of 2014, with the average house price soaring by 12 per cent or £14,874 to stand at £138,619.
It was followed by Brough in Yorkshire, where prices jumped by 11.9 per cent or £25,184, to leave the average property costing £211,156.
Lawrence Hall, of Zoopla, said:“Homeowners up and down the country are starting to see the benefits of the recovery as home values make further headway in 2014.
“Property price growth has largely been a London and South East story until recently, so it is very encouraging to see the house price recovery broadening and the ripple effect starting to take hold further north.
“Over the past few years Salford especially has prospered from job creation in the area, which has helped boost the local property market.”
Overall, house prices rose by just over 6 per cent in the South West, North West and Yorkshire and the Humber during the first six months of the year, while they rose by more than 5 per cent in the East Midlands, North East and West Midlands.
Gains were lowest in Wales and Scotland at 3.5 per cent and 1.1 per cent respectively.
Recent strong house price growth has led to concerns that a bubble could be building up in the property market, particularly in London where values have soared by 20.1 per cent during the past year.
First-time buyers are being squeezed out of the property market by soaring house prices, with numbers dropping by 20 per cent during June, research showed today.
People buying their first home accounted for just one in five sales during the month, down from one in four in May, and the lowest proportion since May last year.
The National Association of Estate Agents said buyers aged between 18 and 30 accounted for only 3 per cent of all purchasers during the month, the lowest level it has ever recorded.
The group warned that the plight of first-time buyers is expected to get worse going forward.
Nearly 80 per cent of estate agents expect the Bank of England’s recent call for lenders to limit mortgage advances to people borrowing more than 4.5 times their income to hit those buying their first home.
The figures came as haart warned the typical homebuyer would face a stamp duty bill of at least £7,500 by the end of 2016 if house prices continued to rise at their current rate.
The independent estate agent said if property values continued to increase at an annual rate of 10 per cent, the average property would cost more than £250,000 in two-and-a-half years’ time.
This rise would push people buying an averaged priced home into the 3 per cent stamp duty band, up from the 1 per cent band for properties costing up to £250,000.
Mark Hayward, managing director of the National Association of Estate Agents, said: “Things are getting even tougher for first-time buyers.
“Not only do you now need to stump up ridiculously large sums of money in terms of deposits and stamp duty to be able to get on the ladder, but new rules mean buyers will also have to prove they can easily afford repayments now and in the future.
“Alongside this, a scaling back of the Government’s Help to Buy scheme and the implementation of the Mortgage Market Review in April will also have a significantly negative impact on the first-time buyer market.”
But there was some good news for potential buyers during the month, with the average number of properties estate agents had on their books increasing to 46, up from 44 in May.
While the figure still remains low compared with historical standards, it was accompanied by a fall in the average number of buyers registered with estate agents, with these dropping to 371, down from 374, helping to ease the mis-match between supply and demand.
In a further sign that the property market is beginning to slow down, there was also a fall in sales agreed during the month.
The typical estate agent branch sold nine properties in June, down from an average of 10 homes in May.
The drop is likely to help further ease concerns that a bubble was building up in the property market.
But there is growing evidence that the market is beginning to cool as more homes come on to the market, and buyers become more cautious in anticipation of future interest rate hikes.
Katie Price is planning to sell her West Sussex mansion, where she found her husband cheating with her best friend.
The glamour model wants to make a fresh start by selling the £2m property, which includes stables – one of several locations where the cheating took place.
The stables are a painful reminder for horse-loving Katie following her husband’s confession of an affair with her best friend Jane Pountney earlier this year.
It follows fresh revelations today that her husband Keiran Hayler also had an affair with her friend Chrissy Thomas in road lay-bys.
Katie told The Sun: “I’ve known Jane and Chrissy for years. They are two people who I thought would have my back and Kieran has been in my house with all three of us, knowing he is sleeping with all of us.”
Keiran is alleged to have had a seven month affair with Jane – on many occasions in the home as well as the stables.
He told the Sun on Sunday: “It was around 1am and I was hammered from drinking Porn Star martinis. I head up to the stables where a friend of mine was meant to be staying and Jane followed me. We had sex standing up.”
Katie is pregnant with her fifth child – her second with Keiran.
She bought the luxury six bedroom home in 2010 and moved in with her then husband Alex Reid.
She was previously married to singer Peter Andre, who is the father of two of her older children. Her fifth child is from a relationship with Dwight Yorke.
Katie had initially tweeted that she would be getting a divorce from Keiran. But it seems those plans may now be on hold after she co-hosted a baby shower with him and also suggested that she may take his name if he could prove himself to her following his affair. The property is being sold privately.
So, where will the glamour model go next? If she remains in West Sussex, here are some options with her £2m budget.
1. Five bedroom house in East Grinstead.
2. Six bedroom house in Burgess Hill.
3. Six bedroom house near Pulborough.
The number of people getting on to the property ladder hit a seven-year high during the first half of the year, figures showed today.
An estimated 144,500 people bought their first home in the six months to the end of June, the highest number for the first half of the year since 2007, before the financial crisis struck.
The total was 25 per cent up on the same period of 2013, according to mortgage lender Halifax.
It was also the third consecutive year in which first-time buyer numbers have surpassed the 100,000 mark during the six months to June.
The increase in first time buyers outstripped the improvement in the number of existing homeowners who bought a property, with the number of next time buyers increasing by only 20 per cent during the period.
As a result, first time buyers accounted for 46 per cent of all home purchases during the six months, the highest proportion since 2000.
Despite recent strong house price inflation, low interest rates helped to keep mortgage repayments affordable for people buying their first home.
The typical person getting on to the property ladder had to devote 31 per cent of their post-tax income to mortgage repayments.
Halifax said this figure was significantly below both the peak of 47 per cent of earnings reached during the first half of 2007 and the long-term average of 34 per cent.
But first time buyers did have to put down significant deposits, with these averaging £31,129 – 9 per cent more than they put down a year earlier.
The size of the deposit as a proportion of the purchase price has almost doubled since the financial crisis struck, to stand at 19 per cent during the second quarter of 2014 compared with 10 per cent in 2007, as lenders withdrew high loan-to-value mortgages.
The average age of a first time buyer has also increased, rising to 30 years old in 2014, compared with 28 in 2009.
Craig McKinlay, mortgages director at Halifax, said: “First time buyers are an important segment on the housing market, accounting for 46 per cent of home purchases in the first six months of the year.
“The resurgence in the number of first time buyers getting on to the housing ladder has been buoyed by improving economic conditions, rising employment levels as well as Government schemes such as Help to Buy.”
The typical first time buyer paid £167,137 for their home during the first half of the year, putting 60 per cent of people above the £125,000 threshold at which Stamp Duty kicks in.
Unsurprisingly, there were significant regional variations, with first time buyers in London paying the most for their property at an average of £306,354.
This figure was more than £100,000 above those in the South East, which had the second highest purchase price at an average of £203,826.
The North was the least expensive region in which to get on to the housing ladder, with first-time buyers paying an average of £110,410 there, meaning 72 per cent of them did not have to pay any stamp duty.
People buying their first home in London had to save the most for a deposit at £76,435, while those in the North West put the least down at £16,532.