This is the annual Halifax Rural Housing Review. The Review covers Local Authorities in Great Britain which are defined as rural areas, according to ONS classifications. The Review uses Halifax house price data to calculate rural house price movements. Premium attached to countryside living Rural homes 43,490 more expensive than homes in urban areas Property prices in the countryside are, on average, 43,490 (22%) higher than in urban areas 1, 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 ( 168,317) - the largest difference. In the East of England, the premium is 16,806 (or 6%) - the smallest difference. (See Table 1) Rural Britain less affordable than urban areas House prices in rural areas are less affordable than in urban areas. The average property price in rural areas is 7.0 times average annual earnings 2 compared with a ratio of 5.9 in urban areas. The least affordable rural local area district (LAD) in Great Britain is Tandridge in Surrey where the average house price of 433,932 is 10.8 times local annual average earnings of 40,266. All ten of the least affordable rural LADs 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; followed by Purbeck in Dorset (9.4), Mid-Sussex, Cotswold and North Devon (all 9.2). The least affordable rural LADs outside the south are Hambleton (8.2) and Ryedale (8.1) both are in the North York Moors. Copeland in West Cumbria is the most affordable rural LAD in Great Britain with an average house price of 140,364 that is 3.7 times local average annual earnings of 38,367. (See Table 2 and 3) Chiltern is the most expensive rural area in Britain with an average house price of 465,970. The next most expensive rural LADs are Waverley in Surrey ( 462,145), Tandridge and South Oxfordshire ( 396,287). The average house price in Chiltern is four times higher than in East Ayrshire ( 115,394) - the least expensive rural LAD. Prices in urban areas have been rising faster over the past five years 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. 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
(these figures exclude Greater London). Overall, the rural-urban premium has narrowed from 34% (or 52,279) over the last decade. Fewer first-time buyers in rural areas 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 more than half (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 around a quarter in East Dorset (24%), Waverley and West Dorset (both 26%). Away from southern areas, the proportion of first time buyers increases significantly to over three out of five buyers in Pendle in Lancashire (62%) and Gwynedd (61%). (See Tables 4 and 5) Social Housing in Rural Areas Social housing provision is typically lower in rural areas of Britain, with 12% of the housing stock accounted for by social housing compared with 19% in urban areas. There are twenty areas where social housing accounts for less than 10% of total housing stock, including the Wyre, Ribble Valley (both in Lancashire), Wealden in East Sussex and East Dorset. (See Table 6) East Ayrshire has the highest level of social housing in rural Britain, followed by Ceredigion, Forest Heath in West Suffolk and Copeland. (See Table 7) Property Size Properties in the country are typically more than a fifth larger than in towns and cities. The average rural home is 120m 2 in size compared with 97m 2 in urban areas. Craig McKinlay, Mortgage Director, Halifax commented: "Many homeowners 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. "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. Table 1: Rural and Urban al Average Prices, 2015
Average Price 2015 ( )* % Change (2010-2015) Premium for Rural v Urban Rural Urban Rural Urban % North East 158,596 140,530 13% 16% 18,066 13% North West 210,932 155,723 8% 17% 55,209 35% Yorkshire and The Humber 201,611 148,562 13% 17% 53,049 36% East Midlands 207,734 158,062 16% 21% 49,672 31% West Midlands 252,927 168,317 12% 19% 84,610 50% East of England 278,793 261,987 16% 32% 16,806 6% South East 369,956 286,614 17% 29% 83,342 29% South West 263,057 207,786 8% 14% 55,271 27% Scotland 185,013 157,966 13% 15% 27,047 17% Wales 172,517 145,237 10% 16% 27,279 19% Great Britain (excluding London) 236,971 193,481 13% 23% 43,490 22% Source: Halifax. *12 months to September Table 2: Ten Most Affordable Rural Local Authority Districts, 2015 House Average Local Authority Prices earnings District 2015 ( )* 2015 ( )** Price to Earnings ratio Copeland North West 140,364 38,367 3.7 East Ayrshire Scotland 115,394 30,299 3.8 Yorkshire and The North Lincolnshire Humber 138,866 31,915 4.4 Dumfries and Galloway Scotland 128,245 28,691 4.5 Allerdale North West 145,679 31,969 4.6 Pendle North West 131,542 27,422 4.8 Bassetlaw East Midlands 141,092 29,133 4.8 Carmarthenshire Wales 150,185 29,517 5.1 Staffordshire Moorlands West Midlands 157,549 30,946 5.1 Argyll and Bute Scotland 153,508 30,065 5.1 Rural Great Britain 236,971 33,764 7.0 Urban Great Britain excluding London 193,481 32,551 5.9 Source: Halifax. *12 months to September; ONS Table 3: Ten Least Affordable Rural Local Authority Districts, 2015
Local Authority District House Prices 2015 ( )* Average earnings 2015 ( )** Price to Earnings ratio Tandridge South East 433,932 40,266 10.8 East Dorset South West 329,056 34,411 9.6 Purbeck South West 265,268 28,216 9.4 Mid Sussex South East 339,803 36,908 9.2 Cotswold South West 318,797 34,725 9.2 North Devon South West 252,339 27,545 9.2 North Dorset South West 262,467 28,755 9.1 East Devon South West 270,993 30,059 9.0 New Forest South East 296,576 33,489 8.9 Vale of White Horse South East 327,191 37,283 8.8 Rural Great Britain 236,971 33,764 7.0 Urban Great Britain (excluding London) 193,481 32,551 5.9 Source: Halifax. *12 months to September; ONS Table 4: Rural Local Authority Districts with the lowest % of First-Time Buyers (FTBs), 2015 Local Authority District FTB% share of all buyers* Purbeck South West 20% East Dorset South West 24% Waverley South East 26% West Dorset South West 26% Derbyshire Dales East Midlands 28% Melton East Midlands 29% Rother South East 29% South Northamptonshire East Midlands 30% Chiltern South East 30% Maldon East of England 32% Rural Great Britain 42% Urban Great Britain 54% Source: Halifax House Price Database; * 12 months to September
Table 5: Rural Local Authority Districts with the highest % of First-Time Buyers (FTBs), 2015 Local Authority District FTB% share of all buyers* Pendle North West 62% Gwynedd Wales 61% Forest Heath East of England 58% Fenland East of England 57% Denbighshire Wales 56% Dumfries and Galloway Scotland 55% Western Isles Scotland 55% Carmarthenshire Wales 55% East Staffordshire West Midlands 53% Copeland North West 52% Rural Great Britain 42% Urban Great Britain 54% Source: Halifax House Price Database; * 12 months to September Table 6: Ten Rural Local Authority Districts with the Least Social Housing, Great Britain 2014 Local Authority District Social Housing as % of All Housing Stock, 2014 Wyre North West 7% Ribble Valley North West 8% Wealden South East 8% East Dorset South West 8% Harborough East Midlands 8% South Lakeland North West 8% Torridge South West 8% Staffordshire Moorlands West Midlands 8% Rushcliffe East Midlands 8% Craven Yorkshire and The Humber 9% Rural Great Britain 12% Urban Great Britain 19% Sources: CLG, Scottish Govt. / Halifax estimates
Table 7: Ten Rural Local Authority Districts with the Most Social Housing, Great Britain 2014 Local Authority District Social Housing as % of All Housing Stock, 2014 East Ayrshire Scotland 22% Ceredigion Wales 19% Forest Heath East of England 19% Copeland North West 19% Allerdale North West 19% East Lothian Scotland 19% Northumberland North East 17% North Warwickshire West Midlands 17% St Edmundsbury East of England 17% Wiltshire South West 17% Rural Great Britain 12% Urban Great Britain 19% Sources: CLG/ Halifax estimates Notes to editors: 1 Greater London is excluded from urban averages for house prices. 2 From ONS and Halifax estimates for September 2015 for full-time employees. All price figures refer to the arithmetic average of house prices and have not been standardised. These prices are not standardised and therefore can be affected by changes in the sample from year to year. The data covers the period 2010 to 2015 and has been extracted from the Halifax House Price database. The latest figures cover the 12 months to September 2015. This analysis was undertaken using the Office for National Statistics (ONS) Urban Rural classification. This classification defines an area as a Rural Area if it lies in a town or village of less than 10,000, or as an urban area if it lies in a town or city of 10,000 or more. A rural local authority is one where the majority of people live in rural areas. Data on average earnings is based on ONS figures for April 2014, which have been inflated by national average earnings growth to calculate 2015 estimates at local authority level. The affordability ratio is calculated as average house prices divided by the average annual earnings of full time employees. Data on social housing for England and Wales is published by the CLG. Scottish data is from the Housing Statistics for Scotland published by the Scottish Government. "This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance." For further information please contact
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