The average house price across rural Great Britain fell by 13% over the past 12 months compared to an average 18% drop in house prices in urban areas. The average rural house price of £203,535 is now 21% higher than the average urban house price of £168,376 compared to 15% higher a year ago.
The decline in house prices has improved housing affordability in rural areas. Rural house prices in 2009 are, on average, just over six times average gross annual earnings - the lowest ratio since 2002. However, housing in rural areas remains markedly less affordable than in urban areas. The average property price in rural areas is 6.3 times average annual earnings compared to a ratio of 5.2 in urban areas.
Around 27% of all home buyers with a mortgage in rural areas are first-time buyers (FTBs); the highest proportion since 2000. Nonetheless, there are still far fewer FTBs in rural areas with FTBs accounting for 44% of all buyers in urban local authorities.
Suren Thiru, economist at Halifax, said: "Homes in rural areas continue to command a marked premium over urban locations, partly reflecting the quality of life benefits that many people associate with living in the countryside. Higher prices, together with generally lower earnings, mean that housing in rural areas remains significantly less affordable than in urban areas. The difficulties this presents for households living in the countryside are further aggravated by the relatively low levels of social housing in rural areas."
