Britain’s economy grew by 0.8 per cent during the first three months of the year, the fifth consecutive quarter of growth, Government figures showed today.
The latest increase marks the longest period of continuous expansion since the downturn, and leaves GDP just 0.6 per cent below the peak reached in the first quarter of 2008, according to the Office for National Statistics.
There was also a fall in the number of individuals declared insolvent during the first three months of the year.
A total of 24,931 people in England and Wales went bankrupt or took out a Debt Relief Order or Individual Voluntary Arrangement during the first quarter, 0.3 per cent fewer than during the same period of 2013.
The figures are good news for the housing market, as they suggest the British economy is continuing to power ahead, providing strong support for employment.
The fact that individual insolvency numbers also continued the downward trend seen since numbers peaked in early 2010 also suggests the majority of households are not having problems keeping up with their debt.
Azad Zangana, European economist at Schroders, said: “These are good results for the UK economy and they confirm that the UK is one of the fastest growing economies in the advanced world.
“Looking ahead, we expect the economy to maintain a strong pace of growth, driven by loose credit conditions, low interest rates, and easing fiscal austerity.
“The rebound in the housing market is helping to boost household spending, while companies appear to be gaining in confidence and so are starting to increase levels of investment.”
The ONS said GDP in the first quarter was 3.1 per cent higher than it had been a year earlier.
Output increased in three of the four main industrial groupings within the economy, with output increasing by 0.9 per cent in the services sector, while it was up 0.8 per cent in production and 0.3 per cent in construction.
But agriculture continued to lag behind other areas of the economy, with output contracting by 0.7 per cent during the quarter.
The ONS added that construction output may have been affected by the storms and high rainfall in January and February.
It stressed that today’s GDP figure, which was slightly below economists’ consensus of 0.9 per cent, was only a preliminary estimate and was subject to revision as more data became available.
The housing market is performing strongly on the back of the UK economic recovery.
A combination of strong demand and a shortage of supply is driving prices higher, with Nationwide reporting that the average property value was 9.5 per cent up on a year earlier at the end of March.
Competition for properties has also become so intense that one in five buyers paid more than the asking price in March, the National Association of Estate Agents said.
Buyers are paying the highest proportion of a property’s asking price for more than a decade as a shortage of supply continues to drive values higher, figures showed today.
The average homebuyer paid 96.7 per cent of the asking price in April, the highest level since September 2002, according to property intelligence group Hometrack.
Demand for property continued to grow during the month, with a 3.3 per cent rise in the number of buyers registering with estate agents.
But the number of new homes being put up for sale failed to keep pace with buyer numbers, rising by just 1.9 per cent in April.
Unsurprisingly, the mismatch between supply and demand led to a further fall in the average amount of time a property spends on the market, with this dropping to 6.3 weeks – the lowest level since June 2007.
The typical cost of a home rose by 0.6 per cent in April, as growth momentum picked up in the regional housing markets.
Outside of London, 48 per cent of postcodes registered higher prices during the month, three times more than a year ago, and the highest level since June 2004.
Richard Donnell, director of research at Hometrack, said: “Improving market sentiment and low mortgage rates are supporting increased activity.
“The time on the market indicator delivers a strong indication for the overall health of the market and this measure has declined below 10 weeks across all regions.”
But he added that while London continued to register above average growth at 0.8 per cent, the rise was driven by lower value markets that offered buyers better value.
The group found that there were growing signs of price resistance on the part of buyers in London following recent rapid rises, and it said this could check the rate of house price inflation in the coming months.
The average time a property spent on the market in London rose to 3.4 weeks, up from 2.7 weeks, during the month.
There was also a fall in the number of London postcodes that registered a price gain, with 66 per cent posting rises, compared with 76 per cent during the second half of 2013.
But buyers still paid 99 per cent of a property’s asking price, although this was down slightly from 99.3 per cent in March.
Donnell said: “While these changes indicate very strong market conditions, they suggest that buyers are starting to become less willing to bid up the cost of housing at recent rates.
“The impetus for house price growth looks set to continue to transition into the regional housing markets over 2014.
“What is less clear is the scale of pent-up demand that exists to sustain further house price increases.”
Outside of London, price increases were highest in the South West during April, with the typical home’s value rising by 0.8 per cent, followed by the South East and East Anglia both with gains of 0.7 per cent.
Sales levels increased most in Wales and the East Midlands at 16.4 per cent and 11 per cent respectively.
But there was no change in the number of homes put up for sale in Wales during the month, while in Yorkshire and Humberside the number of properties on the market fell by 0.9 per cent.
Properties for sale in Wales:
1. Four bedroom property in Cardiff for £319,950
2. Two bedroom barn conversion in Carmarthenshire for £495,000
3. Five bedroom home in Cardiff for £720,000
Which are the most popular properties in April so far? From north London celebrity homes with contemporary interiors to renovation projects on the other side of the country, here are the most viewed properties on Zoopla.
1. This bungalow has talent – all £1,150,000 of it. While one of its previous owners Alesha Dixon is busy hitting the buzzer as a judge on Britain’s Got Talent, this three bedroom property in Hertfordshire is showcasing its contemporary interior design to prospective buyers.
2. A four bedroom semi-detached house in Manchester continues to attract attention. The property has been extensively modernized and includes solar panels, which provide a tax free income and free electricity.
3. What would you pay for a five bedroom flat? If you are seeking one of the apartments at London’s iconic One Hyde Park, you will need £68m. The accommodation spans an entire floor and boasts views of both Knightsbridge and Hyde Park.
4. A nine bedroom detached house in London’s prestigious confines of Kensington is being offered (POA) with full planning permission to extend the property to include a separate cottage, tennis court and garden pavilion.
5. An extraordinarily exclusive and highly secure property in central Knightsbridge near Hyde Park (POA), with 20 bedrooms.
6. The Bishops Avenue in London never seems to be out of the property headlines, having been dubbed Billionaires’ Row. This nine bedroom detached home is set behind high electric gates and costs £38m.
7. Buying a home in Sandbanks means you can count the likes of football manager Harry Redknapp as a neighbour. This five bedroom property is on the market for £6.7m and boosts view of Poole Harbour, a sweeping driveway, a leisure suite, a fully fitted media room and a 1,000 sq ft master suite.
8. Restoration projects continue to be fashionable, with this four bedroom detached house in Plymouth making the top 10 most viewed properties on Zoopla. It is for sale by tender.
9. Set over three levels, this four bedroom house in Battersea provides 1,700 sq ft of family living space. It is on the market for £1,575,000.
10. This nine bedroom mansion may look like it is set in the countryside, but it is in fact set in the heart of the London borough of Richmond. It may also be surprising to learn it is a new build. (POA)
The number of mortgages approved for house purchase soared by 43 per cent during March as demand from buyers remained high, figures showed today.
A total of 45,933 mortgages were lined up for people buying a home during the month, up from 32,180 in March 2013, according to the British Bankers’ Association.
There was also a steep jump in the value of loans for house purchase that were approved, with these rising 53 per cent year-on-year to £7.55bn.
But there was a slight drop in both the number and value of pipeline mortgages for house purchase compared with February.
It was the second consecutive month during which these measures have slowed.
Today’s figures reflect the current buoyant state of the property market as buyers compete to secure a home from a limited number of properties on the market.
The National Association of Estate Agents recently said one in five buyers had paid more than the asking price in March in order to buy a property.
Recent gains have left the average home in England costing £259,745, according to Zoopla.
Strong house price gains in recent months have sparked concerns that there could be a bubble building up in the property market.
But the recent slowdown in month-on-month mortgage approvals suggests the market is beginning to slow as demand that built up during the recession works it way through.
Ed Stansfield, chief property economist at Capital Economics, said the drop in the number of mortgages approved for house purchase for the second consecutive month provided further evidence that the housing market recovery may be coming off the boil.
But he added: “With the economic recovery gathering momentum, interest rates set to stay low and real incomes finally starting to rise again, we suspect that mortgage lending will soon reverse its recent decline.
“But, with many lenders still displaying a degree of caution, we would not be surprised to see the pace of the recovery slacken off.”
Mortgage advances also remained buoyant during March, the BBA said.
A total of £10.99bn was lent during the month, 38 per cent higher than a year earlier, but slightly below the figure for February.
Net lending, which strips out repayments and people remortgaging, was £806m in March.
The figure represents a considerable turnaround from March 2013, when the number was negative, with borrowers repaying £718m more than was advanced during the month.
The BBA said: “Mortgage assistance schemes are helping first-time buyers and housing chains generally, as housing market activity rises.”
Adding an extra bedroom is the best way to increase the value of your home, but carrying out the wrong ‘improvements’ could make your property worth less, research showed today.
The buoyant housing market has boosted people’s confidence in property, with 42 per cent planning to carry out home improvements in the next six months in the hope of making their home worth more, according to Zoopla.
But while adding an extension or carrying out a loft conversion could boost the value of your home by up to a fifth, bodged DIY jobs could knock thousands off its value.
The home improvement that will have most impact on a property’s value is adding an extra double bedroom and bathroom through carrying out a loft conversion, according to Nationwide.
The group estimates that this improvement could add 21 per cent to the value of a typical home.
With the average home in England currently worth £259,745, a loft conversion could boost a property’s price by around £54,500.
Next on the list is adding an extra bedroom through building an extension, with this boosting the typical home’s price by 11 per cent or £28,600.
Putting in an extra bathroom typically adds 5 per cent or £13,000 to a property’s value, as does increasing the floor space by 10 per cent.
Robert Gardner, Nationwide’s chief economist, said: “Having more usable space is generally thought to be consistent with better quality accommodation and people are prepared to pay for it.
“Home improvements that increase floor area, such as an extension or loft conversion, remain a good way to add value.”
But the impact of adding an extra bedroom varies according to property type.
Nationwide estimates that turning a two-bedroom semi-detached property into a three-bedroom one will boost its value by 12 per cent, but adding an extra bedroom to a three bedroom detached home will only increase its value by around 9 per cent.
Nationwide thinks home improvements that increase a property’s energy efficiency will also have a growing impact on prices.
It points out that the number of homes that have an energy efficiency rating of A to D, the top four scores, has increased from 20 per cent to 65 per cent since 1996.
Gardner says, “With fuel costs continuing to rise and an increased emphasis on environmental sustainability, we expect households to become increasingly conscious about their energy use.”
Other improvements, such as interior design, a landscaped garden or a fitted kitchen can also boost the value of a property, but Gardner warned that these improvements were subjective and difficult to quantify.
He said: “While one designer’s makeover will add value for some buyers, the same design may detract from the price for others.
“Improvements finished to a higher standard will be more attractive than bodged jobs, but there is a trade off between the cost spent on refurbishment and the price someone else is prepared to pay for it.”