Rural homes in the UK £43,490 more expensive than those in urban areas
2015-11-05
Image Property prices in the countryside in the UK are, on average, £43,490 or 22% higher than in urban areas, according to the latest annual Halifax Rural Housing Review.
There is a rural premium in all regions with countryside homes typically commanding a significant price premium over urban areas, although there are large variations across the country.
In rural areas of West Midlands the average house price of £252,927 is £84,610 or 50% higher than in the region's urban areas at £168,317, the largest difference in the index. In the East of England, the premium is £16,806 or 6%, the smallest difference.
House prices in rural areas are less affordable than in urban areas, the research also shows. The average property price in rural areas is seven times average annual earnings compared with a ratio of 5.9 in urban areas.
The least affordable rural local area district is Tandridge in Surrey where the average house price of £433,932 is 10.8 times local annual average earnings of £40,266. All 10 of the least affordable rural districts in Britain are in southern England, including East Dorset where the average house price of £329,056 is 9.6 times local annual average earnings.
This is followed by Purbeck in Dorset at 9.4, Mid-Sussex, Cotswold and North Devon all at 9.2. The least affordable rural district outside the south are Hambleton at 8.2 and Ryedale at 8.1, both in the North York Moors.
Copeland in West Cumbria is the most affordable rural district with an average house price of £140,364 that is 3.7 times local average annual earnings of £38,367 while Chiltern is the most expensive with an average house price of £465,970.
The next most expensive rural districts are Waverley in Surrey at £462,145, Tandridge and South Oxfordshire at £396,287. The average house price in Chiltern is four times higher than in East Ayrshire at £115,394 which is the least expensive rural district.
Despite the higher price for buying in the countryside the gap with urban prices is narrowing, and property prices have risen more slowly in rural areas during the past five years, according to the research.
Between 2010 and 2015, the average price of a home in the countryside rose by 13% compared with an average increase of 23% in urban areas. Between 2014 and 2015, the average price of a home in the countryside has risen by 5% compared with an average 8% increase in urban areas, excluding Greater London. Overall, the rural/urban premium has narrowed from 34% or £52,279 over the last decade.
First time buyers account for 42% of all mortgage financed purchases in rural areas. This is significantly lower than in urban areas where first time buyers account for 54% of such purchases. Affordability difficulties are the key factor behind the lower level of first time buyers in rural areas.
Due to the high level of property prices, getting on the rural property ladder is at its most challenging for first time buyers in southern England. First time buyers account for only a fifth of all purchases in Purbeck, and 24% in East Dorset and Waverley and West Dorset both at 26%.
Away from southern areas, the proportion of first time buyers increases significantly to over three out of five buyers in Pendle in Lancashire at 62% and Gwynedd in Wales at 61%.
Properties in the country are typically more than a fifth larger than in towns and cities. The average rural home is 120 square meters in size compared with 97 square meters in urban areas.
‘Many home owners aspire to live in the countryside, attracted by the prospect of a better quality of life, open space and a cleaner environment. However, realisation of this dream comes at a cost with average property values typically over a fifth higher than in urban areas,’ said Craig McKinlay, Halifax mortgage director.
‘A side effect of rising property values is that housing affordability has become an increasing concern in many rural areas. This is particularly true in the south where those on average incomes find it very difficult to enter the market,’ he added.
source: http://www.propertywire.com/news/europe/uk-property-rural-premium-2015103011152.html
In rural areas of West Midlands the average house price of £252,927 is £84,610 or 50% higher than in the region's urban areas at £168,317, the largest difference in the index. In the East of England, the premium is £16,806 or 6%, the smallest difference.
House prices in rural areas are less affordable than in urban areas, the research also shows. The average property price in rural areas is seven times average annual earnings compared with a ratio of 5.9 in urban areas.
The least affordable rural local area district is Tandridge in Surrey where the average house price of £433,932 is 10.8 times local annual average earnings of £40,266. All 10 of the least affordable rural districts in Britain are in southern England, including East Dorset where the average house price of £329,056 is 9.6 times local annual average earnings.
This is followed by Purbeck in Dorset at 9.4, Mid-Sussex, Cotswold and North Devon all at 9.2. The least affordable rural district outside the south are Hambleton at 8.2 and Ryedale at 8.1, both in the North York Moors.
Copeland in West Cumbria is the most affordable rural district with an average house price of £140,364 that is 3.7 times local average annual earnings of £38,367 while Chiltern is the most expensive with an average house price of £465,970.
The next most expensive rural districts are Waverley in Surrey at £462,145, Tandridge and South Oxfordshire at £396,287. The average house price in Chiltern is four times higher than in East Ayrshire at £115,394 which is the least expensive rural district.
Despite the higher price for buying in the countryside the gap with urban prices is narrowing, and property prices have risen more slowly in rural areas during the past five years, according to the research.
Between 2010 and 2015, the average price of a home in the countryside rose by 13% compared with an average increase of 23% in urban areas. Between 2014 and 2015, the average price of a home in the countryside has risen by 5% compared with an average 8% increase in urban areas, excluding Greater London. Overall, the rural/urban premium has narrowed from 34% or £52,279 over the last decade.
First time buyers account for 42% of all mortgage financed purchases in rural areas. This is significantly lower than in urban areas where first time buyers account for 54% of such purchases. Affordability difficulties are the key factor behind the lower level of first time buyers in rural areas.
Due to the high level of property prices, getting on the rural property ladder is at its most challenging for first time buyers in southern England. First time buyers account for only a fifth of all purchases in Purbeck, and 24% in East Dorset and Waverley and West Dorset both at 26%.
Away from southern areas, the proportion of first time buyers increases significantly to over three out of five buyers in Pendle in Lancashire at 62% and Gwynedd in Wales at 61%.
Properties in the country are typically more than a fifth larger than in towns and cities. The average rural home is 120 square meters in size compared with 97 square meters in urban areas.
‘Many home owners aspire to live in the countryside, attracted by the prospect of a better quality of life, open space and a cleaner environment. However, realisation of this dream comes at a cost with average property values typically over a fifth higher than in urban areas,’ said Craig McKinlay, Halifax mortgage director.
‘A side effect of rising property values is that housing affordability has become an increasing concern in many rural areas. This is particularly true in the south where those on average incomes find it very difficult to enter the market,’ he added.
source: http://www.propertywire.com/news/europe/uk-property-rural-premium-2015103011152.html
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