While a rural premium exists in all regions it differs significantly, ranging from £86,218 in the South East to £11,570 in the North East. In percentage terms, the premium varies from 59% in the West Midlands to 9% in the North East.
Rural house prices have underperformed those in urban areas since 2009
In the past four years, the average price of a home in the countryside has risen by 2% compared with an average 10% increase in urban areas. While prices have risen more rapidly in urban areas in most regions since 2009, a key factor behind the bigger increase in urban house prices has been the relative strength of prices in Greater London. Excluding London, urban prices have risen by 6%.
The recent outperformance of house prices in urban areas may also partly reflect the overall increase in the number of first-time buyers since 2010 as they represent a larger proportion of the market in urban areas. Over the same period, there has been a modest decline in the number of those moving home; a group that is more important in rural property markets.
Martin Ellis, housing economist at Halifax, commented:
“There is a significant premium on property in the countryside across Great Britain. Country living remains a widespread aspiration, but relatively high prices put rural homes out of the reach for many. Potential first-time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of homebuyers in the countryside than in urban areas.”
