It was snug, round and had a stunning view of a lake, and its residents liked it so much that they stayed put for several hundred years.

Welcome to the oldest house in the UK, newly unearthed by archaeologists amid a series of finds which are changing our knowledge of the earliest Britons.

Found in North Yorkshire, the house is 3.5 metres wide and was held up by a circle of wooden posts. Dark decayed matter in its central hollow suggests a possible roof of thatched reeds, as well as prehistoric attempts to provide creature comforts.

Carbon dating and analysis of hundreds of scattered flint tools reveal the building stood in 8,500BC, when Britain was still joined to continental Europe. At the time it was thought the country was home to restless, nomadic hunters. But the scale of development at the Star Carr site near Scarborough, combined with other recent finds at Howick in Northumberland and East Barns in Scotland, now suggest a much more cosy, settled picture.

"This changes our ideas of the lives of the first settlers to move back into Britain after the end of the last ice age," said Dr Chantal Conneller of Manchester University, whose archaeologists helped discover the house with a team from York University.

"We used to think they moved around a lot and left little evidence. Now we know they built large structures and were very attached to particular places in the landscape."

The previous holder of the title of Britain's oldest house was a similar wooden structure at Howick built 500 years later.

Dr Nicky Milner of York University said: "We can't be sure how long this house will be the record-holder, because dwellings from this post-ice age period now seem to be popping up everywhere."

Despite its northern location, the house is neither a back-to-back nor in a terrace. Milner said: "We've excavated a trench all round it and there was nothing adjoining. But we are sure that there were other houses here. We sank our trench in just one small part of a large area covered with flint tools. It's inconceivable that we'd have struck lucky and found the only house."

The site has yielded far more possessions than would have been acquired by bands of hunter-gatherers on the move. They include a boat paddle, beads, arrowheads and antler headdresses, suggesting rituals developed alongside domestic life.

The current dig is now examining a large wooden platform on the shore of the post-ice age lake, as well as other timber which shows the marks of the earliest carpentry known in Britain. Some of the material may have formed "roads" across the marshy ground, whose high water content has helped to preserve the traces for 10,500 years.

The site is well-known to archaeologists internationally, but the presence of early traces of such size had not been expected. The government is about to make the whole area a national monument.

The minister for universities and science, David Willetts, said the site, whose only known counterparts in Europe are in Denmark and northern Germany, "marries world-class research with the lives of our ancestors".

"It brings out both the similarities and differences between modern life and the ancient past in a fascinating way, and will change our perceptions for ever," he said.

The archaeologists believe the house was repaired and added to several times during its occupation which lasted, uninterrupted, for between 200 and 500 years. Its owners also enjoyed bonfires – to clear land to encourage wild cattle, deer and elks to forage for fresh shoots – and kept dogs.

The population also appears to have respected venerable trees. One of the team's other startling finds is the trunk of a large specimen with the bark still intact, which was spared from the flints used to carve the rest of the settlement's timber.