Rural properties in Scotland more than double in last ten years, new report shows

The average house price in rural Scotland rose by 130%, some £93,561, from £71,872 in 2000 to £165,433 in 2010, equivalent to a weekly increase of £180, according to research by the Bank of Scotland.
 
The rise in rural house prices was greater than the increase in property prices in urban areas which was 112%. The average rural house price is now 20% higher than the average urban house price compared with 10% higher in 2000.
 
Scotland saw the biggest increase in rural property prices, 130%, in Great Britain over the past decade, followed by Yorkshire and the Humber at 123%. However, Scotland did record the largest rural house fall in Britain over the past year, down 2.1%.
 
The research also shows that property prices in rural areas experienced smaller house price falls during the recent downturn in the housing market. Rural property prices fell by 8% between 2007 and 2009 compared with a 14% drop in urban areas.
 
It means that rural housing affordability has deteriorated in the last ten years. Rural house prices in 2010 are, on average, 5.5 times average gross annual earnings. This is up from 3.4 times average earnings in 2000, but lower than the 6.7 multiple in 2007. Rural housing remains less affordable than in urban areas where average prices are 4.6 times average annual earnings.
 
There are also significantly fewer first time buyers in rural areas, accounting for 30% of all buyers compared with 43% in urban areas.
 
‘With the lifestyle benefits associated with residing 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 faster rising property prices and generally lower average earnings, rural homes have become more unaffordable over the past decade, particular for those looking to get on the property ladder,’ said Suren Thiru, housing economist at Bank of Scotland.
 
The research reveals that the most expensive rural local authority district in Scotland is East Lothian with an average house price of £210,750, some 27% above the Scottish rural average of £165,433. East Ayrshire is the least expensive at £107,515.
 
East Ayrshire is the most affordable in both Scotland and Britain with an average house price that is 3.9 times local average annual earnings. The district also has the highest proportion of first time buyers at 42%. In contrast, East Lothian has the smallest proportion of first time buyers, accounting for 23% of all buyers. These proportions reflect the respective affordability situations in these areas.