This article by Property Wire on October 22nd, 2013 reveals a new research country homes command a significant price premium compared to those in towns and cities.
Homes in the country command a significant price premium compared to
properties in towns and cities across the UK, according to new research.
This premium ranges from £86,218 in the South East of England to
£11,570 in the North East of the country, the research from the Halifax
has found.
But when it comes to value 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 research report says that 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.
‘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,’ said Martin
Ellis, housing economist at the Halifax.
‘Potential first time
buyers are particularly affected by high property prices, and
consequently they account for a smaller proportion of home buyers in the
countryside than in urban areas,’ he explained.
The research also
found that the average house price in the countryside is equivalent to
6.3 times gross annual average earnings. The comparable ratio for urban
areas is 4.9.
There are only five rural areas where the ratio of prices to earnings
is below the historical long-term average of 4.0; Copeland in Cumbria
at 2.7, Stirling at 3.4, East Ayrshire at 3.5, the Western Isles at 3.7,
and Pendle in Lancashire at 3.9, so are the most affordable rural areas
in the country.
The Cotswold is the least affordable rural area
in Britain measured by the house price to earnings ratio with an average
house price that is 9.4 times local gross annual average earnings. Six
of the 10 least affordable rural areas in the country are in the South
West.
Chiltern is the most expensive rural area in Britain with an
average house price of £407,012. This is more than four times higher
than in the least expensive rural area of East Ayrshire where the
average price is £100,119.
First time buyers account for 40% of all
mortgage financed purchases in rural areas, significantly lower than in
urban areas where first time buyers account for 52% of such purchases.
Getting
on the rural property ladder is at its most challenging for first time
buyers in southern England. First time buyers account for only a quarter
of all purchases in Cotswold and East Hampshire. In contrast, first
time buyers account for over half of all purchases in Copeland, St
Edmundsbury, Pendle, the Western Isles, Fenland, Moray, North
Warwickshire and Carmarthenshire.
Article Source: http://www.propertywire.com/news/europe/uk-rural-property-premium-201310228374.html
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