Rural property outperforms the urban sector in the UK over the last 10 years, research shows

Rural property prices in the UK rose by £200 a week during the 2000s making countryside living increasingly unaffordable, according to a new report.  

   
The average house price in rural areas increased by 96%, or £102,722, from £107,250 in 2000 to £209,972 in 2010, the sixth annual Halifax Rural Housing Review shows.
 
Using Halifax house price data to calculate rural house price movements, it also shows that the rise in rural property prices was also greater than the increase in property prices in urban areas which was 91%. The average rural house price is now 20% higher than the average urban house price compared to 17% higher in 2000.
 
The research found that prices in rural areas experienced smaller falls during the recent downturn in the housing market. Rural property prices fell by 20% between 2007 and 2009 compared to a 25% drop in urban areas.
 
But urban property has slightly outperformed rural property over the past year. Rural property prices rose by 4% between 2009 and 2010 compared with a 5% rise in urban house prices.
 
It means that rural property affordability has deteriorated in the last ten years. Rural prices in 2010 are, on average, 6.4 times average gross annual earnings. This is up from 4.6 times average earnings in 2000, but lower than the 8.2 multiple in 2007. Rural property remains less affordable than in urban areas where average prices are 5.4 times average annual earnings.
 
There are significantly fewer first time buyers in rural areas, accounting for 27% of all buyers compared with 45% in urban areas, the research also found.
 
And social housing provision is much lower in rural areas of England. Some 13% of the rural property stock in England was social housing in 2009 compared with 19% in urban areas.
 
On a regional basis prices across rural parts of the South East rose by 8.9% over the past year, more than any other region. In contrast, the West Midlands recorded a 1.2% price fall.
 
‘With the lifestyle benefits associated with living in the countryside still resonating with homebuyers, rural properties continue to trade at a significant premium to homes in urban areas. However, as a consequence of rising property prices and generally lower average earnings, the housing market in rural areas has become more challenging over the past decade, particularly for those looking to get on the property ladder,’ said Suren Thiru, housing economist at Halifax.