Rural buyers pay 27 per cent more for first home
First-time buyers are still far less likely to be able to buy a home in the countryside despite rural property price rises lagging behind town houses, a new study shows.
Research by the Halifax has highlighted a widening divide between town and country, with home buyers in the South West forced to pay a 27% premium for the pleasure living the rural life – an extra £49,583 on average.
Prices in the countryside have grown by just 1% during the past four years compared to towns, where they have climbed 6%, the Halifax says.
A leading estate agent in the region says the only real growth in the Westcountry is in new-build homes on the edge of towns, such as Newton Abbott, which are selling like “hot cakes” as buyers rush to snap up energy-efficient homes, often with help from the Government’s mortgage assistance scheme.
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Richard Copus, chairman of the National Association of Estate Agents (NAEA) in the South West, agreed that price growth in the countryside was flat but said a 6% climb in built-up areas did not chime with his experience.“The cost of brand new homes is showing an increase – though some might turn their noses up at them – they are well-built and so energy efficient that they cost almost nothing to heat,” he added.
“But house prices have not been going up, not in Torbay or Newton Abbot, or even in Exeter and Plymouth, and rural areas remain pretty static.”
Four out of the top ten least affordable places to buy a house in the UK are in Devon, the Halifax study shows.
A league table of affordability shows that homes in the rural council areas of Torridge,Teignbridge, North Devon and East Devon cost seven to eight times the average local full-time earnings figure, the building society and mortgage lender says.
Of these, Torridge and Teignbridge also feature among the ten places with the lowest percentage of first-time buyers.
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, the figures show.
Prices have risen more rapidly in urban areas in most regions since 2009, but even excluding London, which has driven much of the gap, urban prices have still risen by 6%.
Halifax thinks the trend may 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, said: “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.”