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Property prices in rural Scotland double in a decade

Countryside property prices rose by an average of £79,819 from £79,104 in 2001 to £158,923 in 2011, according to the latest annual Bank of Scotland Rural Housing Review.

Whilst average property prices in rural areas have increased by 101% over the past 10 years, in comparison urban areas saw an average increase of £64,263 or 91%, the equivalent of £535 per month from £70,463 to £134,726.
House price growth in rural Scotland outpaced the increase seen in rural Britain as a whole, with average prices rising by 54% to £196,316.

Five rural areas have seen average property prices more than double over the last decade. The largest increases were in Moray at 162%, followed by Aberdeenshire at 150%, the Highlands at 143% and Dumfries and Galloway at 110%.

Aberdeenshire is the most expensive rural local authority district (LAD) in Scotland with an average house price of £198,970, some 25% or £40,000 above the Scottish rural average of £158,923. East Lothian is the next most expensive with an average property price of £172,638. East Ayrshire at £103,981 is the least expensive rural area in Scotland.

The strength in rural property prices over the past decade has resulted in housing becoming less affordable for buyers on average incomes. This is particularly true in the northern areas which have some of the least affordable rural areas in the country.

The Highlands are the least affordable rural area in Scotland as measured by the house price to earnings ratio, with an average house price that is 5.7 times local gross annual average earnings. The price to earnings ratio for all rural areas is five. This compares with an average of 4.2 for urban areas.
There is only one rural area where the ratio of prices to earnings is below the historical long term average of four and that is East Ayrshire at 3.4.
For first time buyers in Scotland’s rural areas buying a property has become increasingly more expensive. Not only do they pay more for a home in a rural setting (£113,714) compared to one in an urban area (£105,495), the average first time buyer price has significantly increased from £48,715 in 2001, an increase of 133% over the decade.

In contrast, in urban areas the average price has increased from £49,810 in 2001, a 112% rise compared with just under a half, 48%, in urban areas.
The lowest share is in the Scottish Borders, where, for example, they account for 28% of all transactions, followed by 30% in Aberdeenshire and 32% in East Lothian. The highest share is in East Ayrshire at 45%.

Social housing provision is lower in rural areas of Scotland with just 10% of the housing stock accounted for by social housing compared with almost 14% in urban areas.
East Ayrshire has the highest level of social housing in not just rural Scotland but also the whole of Britain at 23% of total housing, followed by East Lothian at 18% and the Shetland Isles at 17%.
‘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. This ideal for a life in the country has come at a cost with house prices doubling in value over the past decade in Scotland more than in urban areas. However, for first time buyers average price has risen by even more, limiting their prospects for getting on the housing ladder,’ said Nitesh Patel, housing economist at the Bank of Scotland.