Source: HBOS
RURAL HOUSING IS SIGNIFICANTLY LESS AFFORDABLE
18 May 2006
House prices in rural areas are significantly less affordable than in urban areas, according to the latest Halifax English Rural Housing Index. The average property price in rural areas is 6.7 times average annual earnings compared with a ratio of 5.6 in urban areas.
There are far fewer first-time buyers (FTBs) in rural areas, accounting for only 24% of all buyers compared with 41% in urban areas.
The least affordable rural local authority in England is North Cornwall where the average house price of £212,960 is 10.0 times local annual average earnings of £21,367. North Lincolnshire is the most affordable rural local authority in England with an average house price of £121,539, 3.8 times local average annual earnings of £31,720. The most expensive rural local authority is Chiltern, where the average house price is £384,552.
KEY FINDINGS
Affordability: housing is significantly less affordable in rural areas
• House prices in rural areas are significantly less affordable than in urban areas. The average property price in rural areas is 6.7 times average annual earnings compared with a ratio of 5.6 in urban areas. This difference reflects the combination of generally higher property prices and lower average earnings in rural areas.
• The least affordable rural local authority in England is North Cornwall where the average house price of £212,960 is 10.0 times local annual average earnings of £21,367.
• The next least affordable districts are South Hams (South West) and Waverley (South East) where house prices are 9.3 times average earnings and Penwith (South West) with a ratio of 8.9.
First Time Buyers: far fewer FTBs than in urban areas
• Affordability difficulties are the key factors behind the much lower level of first-time buyers (FTBs) in rural areas. FTBs account for only 24% of all buyers in rural local authorities compared with 41% in urban local authorities.
• The rural district with the least first time buyers is East Dorset where first time buyers represent only 14% of the housing market followed by South Hams (South West) with 15% of first time buyers, Eden (North West) - 15% - Oswestry (West Midlands) - 16%.
• Forest Heath (East of England) has the highest proportion of first time buyers (50%), followed by East Staffordshire (47%) and Huntingdonshire (43%).
Rural House Prices: 19% higher in rural areas
• The average level of house prices in English rural areas is £208,699 . This is 19% higher than the average urban house price of £176,115.
• Unsurprisingly, the most expensive rural areas are in the south. The most expensive rural local authority is Chiltern, where the average house price is £384,552. The next most expensive rural areas are Waverley (£355,242), Tandridge (£327,768) and East Hampshire (£300,781).
• Outside southern England, the most expensive rural local authority is Rutland where prices average £236,723 followed by Derbyshire Dales (£222,625), Hambleton in Yorkshire (£217,031) and the Malvern Hills (£215,940).
• The least expensive rural local authority in England is Pendle (North West) where the average price of a house is £101,317. The least expensive rural authority in southern England is Waveney (East of England) where prices average £138,292.
Growth in Rural House Prices 2000 – 2005: up 89% in five years
• House prices in rural areas have increased, on average, by 89% in the last five years, from £110,237 in 2000 to £208,691 in 2005. This is almost identical to the 90% rise in urban house prices from £92,559 in 2000 to £176,115 in 2005.
• The rural local authority with the strongest growth in house prices in the last five years is Penwith (South West) where prices rose by 172%, from an average of £78,888 in 2000 to £214,382 in 2005.
• Other high growth rural local authorities include Eden (North West) where house prices grew by 170%, North Devon (166%) and North Cornwall (165%).
• The rural local authority with the lowest growth
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