Rural house prices decline by less than urban areas

But 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.

First-time buyers (FTBs) make up 27% of all home buyers with a mortgage in rural areas – 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.

The provision of social housing is significantly lower in rural England than in urban areas: 13% of the rural housing stock in England was social housing in 2008 compared with 19% in urban areas.

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."

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