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Countryside properties continue to command a substantial price premium over urban homes and are 26% higher in price, new research shows. On average, homes in rural areas in Great Britain are £46,575 higher in price and this is true of all regions although it differs significantly across the country, according to a new report from the Halifax. The rural premium is greatest in the West Midlands at £88,781 or 57% compared to £17,570 in the North East or 13% and the research also shows that prices in urban areas have been rising faster over the past five years. Between 2009 and 2014, the average price of a home in the countryside rose by 12% compared with an average increase of 18% in urban areas. Between 2013 and 2014, the average price of a home in the countryside has risen by 8% compared with an average 10% increase in urban areas, excluding Greater London. There are also fewer firs time buyers in rural areas. They account for 42% of all mortgage financed purchases in rural areas, compared to 54% in urban areas. The report says that recent outperformance of house prices in urban areas partly reflects the relative strengthening of the first-time buyer market in the last few years. Since 2010 there has been a significant increase in the number of first-time buyers, and this group typically represents a larger proportion of the market in urban areas. ‘It typically costs significantly more to buy in rural areas with a substantial premium existing in all the regions of Great Britain. This reflects the aspiration of many to own a property in the countryside, said Martin Ellis, housing economist at the Halifax. ‘The relatively high prices, however, put rural homes out of the reach for many, particularly the young. This is reflected in first time buyers accounting for a smaller proportion of home buyers in the countryside than in urban areas,’ he added. The research also shows that affordability is a bigger issue in many rural areas. The average house price in the countryside is equivalent to 6.8 times gross annual average earnings. This significantly exceeds the comparable ratio for urban areas of 5.6. Social housing provision is typically lower in rural areas of England and Wales, with 12% of the housing stock accounted for by social housing compared with 19% in urban areas. There are only three rural areas where the ratio of prices to earnings is below the historical long term average of four; Copeland in Cumbria and East Ayrshire both at 3.8 and North Lincolnshire at 3.9 which are the most affordable rural areas in the country. Chiltern is the most expensive rural area in Britain with an average house price of £477,526, making it the least affordable rural area in Britain as measured by the house price to earnings ratio, with an average house price that is 9.5 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South East with… Continue reading →
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