September 12 2009
Country house prices holding up
Property values in rural areas have held up better than in towns and cities during the past year, research shows.
The average home in a rural area of Britain lost 13% of its value during the 12 months to the end of June, compared with an 18% slide in urban areas, according to high street bank Halifax.
The premium buyers are prepared to pay to live in the countryside has also increased during the past 12 months.
Rural properties now cost an average of £203,535, 21% more than homes in towns and cities, which average £168,376 - up from a difference of 15% a year ago.
The decline in rural house prices has helped to improve affordability, with properties in the countryside now costing an average of 6.3 times average local earnings, the lowest ratio since 2002.
But property in the countryside is still less affordable than in urban areas, where the average home costs 5.2 times average earnings.
First-time buyers accounted for 27% of all homes bought with a mortgage in rural areas during the year to the end of June, the highest proportion since 2000, but still well down on the 44% of buyers in urban areas who were taking their first step on to the property ladder.
The affordability problem in rural areas is made worse by less social housing, with these properties accounting for only 13% of rural housing stock, compared with 19% in towns and cities.
South Oxfordshire is the most expensive rural local authority in Great Britain, with house prices averaging £307,518 - 51% above the average - followed by Uttlesford in Essex, Horsham in West Sussex and Cotswold.
At the other end of the scale, North Lincolnshire is the least expensive rural local authority in which to buy a home, with property prices there averaging £122,052.
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