House prices in rural areas have experienced the biggest increases in the last five years, rising by 29% according to Nationwide Building Society.
North Devon was the area of the UK which recorded the strongest growth – with average house prices up 24% year-on-year in 2021 alone.
Indeed, areas most closely associated with tourism appeared to be among the top performers according to Nationwide’s analysis.
Along with Devon, South Wales, the Cotswolds and the Broads also appeared on top of the list.
Andrew Harvey, senior economist at Nationwide, said this suggested some of the demand may be being driven by those buying holiday or second homes.
He added: “ONS [Office for National Statistics] data suggests that the rate of second home ownership is significantly above average in areas such as South Hams, Pembrokeshire and Ceredigion, areas which are amongst those seeing the fastest rates of growth.”
Have prices been impacted by the ‘race for space’?
Overall, the analysis found, areas classed as ‘predominantly rural’ showed house price growth at a faster rate than more urban areas.
And this would support previous studies which identified the pandemic had created a ‘race for space’ amongst homeowners, keen to move away from cities.
Andrew added: “Our latest analysis suggests that average house price growth in local authorities classified as predominantly rural has outpaced that of other areas, particularly in the last couple of years.”
The 29% average rise in prices in ‘predominantly rural’ areas compared with an 18% hike in places described as ‘predominantly urban’.
Meanwhile, local authorities classified as ‘urban with significant rural’ saw price growth of 23% over the same period.
