‘Race for space’ helps fuel rural house price growth

‘race-for-space’-helps-fuel-rural-house-price-growth

house pricesHouse prices in predominantly rural areas have risen by 22% over the last five years, compared to 17% in predominately urban areas, according to the latest data released by Nationwide. study found.

Rural semi-detached properties have seen the strongest rate of price growth, urban flats the weakest, the

Andrew Harvey, Nationwide’s senior economist, said: “Our latest analysis suggests that average house price growth in local authorities classified as predominately rural has continued to outpace those of other areas.

“Between December 2018 and December 2023, average prices in predominately rural areas increased by 22%, compared with 17% in predominately urban areas. Local authorities classified as ‘urban with significant rural’ saw price growth of 19% over the same period.

Urban rural avg prices

“Average house prices across both urban and rural areas declined a little overall during 2023, which reflects the rise in borrowing costs, which have added to affordability pressures.”

“Despite rural areas performing better overall, only eight out of the 20 top performing local authorities in 2023 were classed as predominantly rural, Nationwide reported.

However, this does include a number of tourist hotspots such as Devon (South Hams and East Devon) and Westmorland & Furness in the Lake District. This suggests some of the demand may be being driven by those buying holiday or second homes. Indeed, ONS data suggests second home ownership is significantly above average in South Hams.

Harvey continued: “We’ve used the ONS’ broad rural urban classification, which looks at the proportion of the population in local authorities living in different area types.

“In local authorities classed as ‘predominantly rural’, more than half of the population live either in rural settlements or market towns.

“In authorities classed as ‘urban with significant rural’, between 26% and 49% of the population live in either rural villages or market towns. In ‘predominantly urban’ local authorities, 75% or more of the population are either in towns or cities.”

Top performing local authorities (2023)

Local Authority GOR Type Average price % chg
Eilean Siar Scotland Rural 158,638 13%
East Renfrewshire Scotland Urban 304,160 10%
South Hams S West Rural 425,284 6%
Midlothian Scotland Urban 236,601 6%
West Lancashire N West Urban sig. rural 236,460 5%
East Devon S West Rural 357,534 5%
East Dunbartonshire Scotland Urban 271,624 4%
Winchester S East Rural 490,588 4%
Newcastle upon Tyne N East Urban 196,297 4%
Rossendale N West Urban 210,065 4%
Mole Valley S East Urban sig. rural 585,689 4%
North West Leicestershire E Mids Rural 266,301 4%
Dundee Scotland Urban 145,119 4%
Rutland E Mids Rural 390,970 3%
Chorley N West Urban sig. rural 235,612 3%
East Lothian Scotland Urban sig. rural 301,780 3%
Manchester N West Urban 248,260 3%
Edinburgh Scotland Urban 321,061 3%
Scottish Borders Scotland Rural 199,997 3%
Westmorland and Furness N West Rural 225,657 3%

Of the 349 local authorities in Great Britain, 212 (61%) are classified as predominately urban, 89 (26%) as predominately rural, while the remaining 48 (14%) are classed as urban with significant rural. The South West has the highest proportion of rural local authorities, with over 50% being predominately rural (14 out of 26), while London unsurprisingly has none.

Top performing rural local authorities (2023)

GOR Local authority Average price % chg
Scotland Eilean Siar 158,638 13%
S West South Hams 425,284 6%
S East Winchester 490,588 4%
East Mids N West Leicestershire 266,301 4%
N West Westmorland & Furness 225,657 3%
East East Cambridgeshire 336,715 2%
W Mids Wychavon 343,058 2%
N East Northumberlamd 197,937 1%
Yorkshire East Riding of Yorkshire 223,571 0%
Wales Gwyneed 212,754 0%

Note: No rural local authorities in London

Top performing urban local authorities (2023)

GOR Local authority Average price % chg
Scotland East Renfrewshire 304,160 10%
N East Newcastle upon Tyne 196,297 4%
N West Rossendale 210,065 4%
E Mids Amber Valley 234,654 3%
Yorkshire Calderdale 191,965 3%
W Mids Bromsgrove 357,013 2%
S East Worthing 350,822 2%
London Richmond upon Thames 745,641 1%
Wales Vale of Glamorgan 297,425 1%
S West Bristol 355,199 0%
East Basildon 375,622 -1%
Rural semi-detached properties have seen strongest price growth over last five years

Harvey added: “Increased demand for properties in rural areas over recent years has been part of the ‘race for space’ seen during the pandemic. However, it is actually rural semi-detached properties that have seen the strongest price growth between December 2018 and December 2023, with average prices increasing by 24%. (Note that due to data availability, these figures exclude Scottish local authorities).

“Rural terraces increased by 23% over the same period, as did urban semis, while rural detached properties increased by 22%. Flats saw considerably weaker price growth, particularly those in predominately urban areas, which increased by just 5% over the last five years.”

Urban rural prop type

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