Property prices in the countryside are, on average, £27,000 (16 per cent) higher than in urban areas, according to the latest annual Halifax Rural Housing Review. The rural premium has increased 35 per cent over the last decade, up from £20,000 in 2001.
Average property prices in rural areas have increased more than urban areas in monetary terms over the past 10 years1. Rural property prices rose by an average of £69,170 – equivalent to £576 per month – from £127,146 in 2001 to £196,316 in 2011. In comparison, urban areas saw an average increase of £62,223 – or £519 per month – from £107,130 to £169,353. In percentage terms, however, prices in urban areas have risen by slightly more than in the countryside – 58 per cent against 54 per cent.
Since the housing downturn started in 2007, property prices in the countryside have fallen by 22 per cent and in urban areas by 23 per cent.
Affordable rural areas
The strength in rural property prices over the past decade has resulted in housing becoming less affordable for buyers on average incomes. This is particularly true in the South West which has eight of the ten least affordable rural areas in the country.
West Dorset is the least affordable rural area in Britain – measured by the house price to earnings ratio – with an average house price that is 8.0 times local gross annual average earnings. South Lakeland in the North West and Ceredigion in Wales are the only areas among the least affordable local authorities that are outside the South West.
The house price to earnings ratio for all rural areas is 5.6. This compares with an average of 4.8 for urban areas.
There are only five rural areas where the ratio of prices to earnings is below the historical long-term average of 4.0. Copeland in Cumbria (3.3), East Ayrshire (3.4), North Lincolnshire, Allerdale in Cumbria (both 3.7) and Northumberland (3.9) are the most affordable rural areas in the country.
Uttlesford is the most expensive rural local authority district (LAD) in Great Britain with an average house price of £307,507; 57 per cent – or £112,000 – above the national rural average (£196,319). East Ayrshire (£103,981) is the least expensive rural area in Britain
Nitesh Patel, housing economist at Halifax, said: “Living in the countryside is an aspiration for many homeowners, attracted by the prospect of a better quality of life, open space and a cleaner environment. The side effect of rising property values is that housing affordability has become an increasing concern in many rural areas, particularly in the south where in all areas those on average incomes will find it difficult to enter the market. This, in turn, is having an adverse impact on the numbers of first-time buyers in these areas.”
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