Booming countryside property values are pricing people out of the market

4 October 2011

Countryside property prices are now on average £27,000 more expensive than homes in urban areas, a 35% increase in the premium compared to £20,000 in 2001.

On average, rural house prices have shot up by £69,170 in the past decade, compared to £62,223 for urban areas, according to Halifax.

The soaring price of rural properties has meant many people on average or low incomes are being priced out of the market.

South pricier than North

Unsurprisingly, the South West has the highest number of least-affordable areas to live – places measured by the house price to the average salary.

Rural house prices in the South are now 52% higher than in the North, with the average price at £252,696 in the South and £166,167 in the North.

West Dorset is the number one least-affordable area in Britain, followed by Torridge and then Mid Devon. In fact, the only two areas in this list not in the South West are Ceredigion in Wales and South Lakeland in the North West.

But these prices are not just specific to rural areas. In the third quarter, Nationwide placed the North as the least expensive region with house prices at £116,610 and London as the most expensive with prices hitting £295,024.

Nitesh Patel, spokesperson for Halifax, says: "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."

Changes in rural house prices by region, 2001-2011

North East 74,621 133,498 79%
North West 117,296 182,698 56%
Yorkshire and The Humber 92,673 166,042 79%
East Midlands 102,707 172,983 68%
West Midlands 142,706 215,294 51%
East of England 146,697 221,637 51%
South East 216,939 303,832 40%
South West 144,247 235,225 63%
Wales 82,921 148,062 79%
Scotland 79,104 158,923 101%
Rural Great Britain 127,146 196,316 54%
Urban Great Britain 107,130 169,353 58%

 *12 months to August,
Source: Halifax House Price Database

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