Rural housing is significantly less affordable: UK Property Shop News

House prices in rural areas are significantly less affordable than in urban areas, according to the latest Halifax English Rural Housing Index. The average property price in rural areas is 6.7 times average annual earnings compared with a ratio of 5.6 in urban areas. There are far fewer first-time buyers (FTBs) in rural areas, accounting for only 24% of all buyers compared with 41% in urban areas.

The least affordable rural local authority in England is North Cornwall where the average house price of £212,960 is 10.0 times local annual average earnings of £21,367. North Lincolnshire is the most affordable rural local authority in England with an average house price of £121,539, 3.8 times local average annual earnings of £31,720. The most expensive rural local authority is Chiltern, where the average house price is £384,552.

KEY FINDINGS

Affordability: housing is significantly less affordable in rural areas

* House prices in rural areas are significantly less affordable than in urban areas. The average property price in rural areas is 6.7 times average annual earnings compared with a ratio of 5.6 in urban areas. This difference reflects the combination of generally higher property prices and lower average earnings in rural areas.

* The least affordable rural local authority in England is North Cornwall where the average house price of £212,960 is 10.0 times local annual average earnings of £21,367.

* The next least affordable districts are South Hams (South West) and Waverley (South East) where house prices are 9.3 times average earnings and Penwith (South West) with a ratio of 8.9.

First Time Buyers: far fewer FTBs than in urban areas

* Affordability difficulties are the key factors behind the much lower level of first-time buyers (FTBs) in rural areas. FTBs account for only 24% of all buyers in rural local authorities compared with 41% in urban local authorities.

* The rural district with the least first time buyers is East Dorset where first time buyers represent only 14% of the housing market followed by South Hams (South West) with 15% of first time buyers, Eden (North West) - 15% - Oswestry (West Midlands) - 16%.

* Forest Heath (East of England) has the highest proportion of first time buyers (50%), followed by East Staffordshire (47%) and Huntingdonshire (43%).

Rural House Prices: 19% higher in rural areas

* The average level of house prices in English rural areas is £208,699 . This is 19% higher than the average urban house price of £176,115.

* Unsurprisingly, the most expensive rural areas are in the south. The most expensive rural local authority is Chiltern, where the average house price is £384,552. The next most expensive rural areas are Waverley (£355,242), Tandridge (£327,768) and East Hampshire (£300,781).

* Outside southern England, the most expensive rural local authority is Rutland where prices average £236,723 followed by Derbyshire Dales (£222,625), Hambleton in Yorkshire (£217,031) and the Malvern Hills (£215,940).

* The least expensive rural local authority in England is Pendle (North West) where the average price of a house is £101,317. The least expensive rural authority in southern England is Waveney (East of England) where prices average £138,292.

Growth in Rural House Prices 2000 2005: up 89% in five years

* House prices in rural areas have increased, on average, by 89% in the last five years, from £110,237 in 2000 to £208,691 in 2005. This is almost identical to the 90% rise in urban house prices from £92,559 in 2000 to £176,115 in 2005.

* The rural local authority with the strongest growth in house prices in the last five years is Penwith (South West) where prices rose by 172%, from an average of £78,888 in 2000 to £214,382 in 2005.

* Other high growth rural local authorities include Eden (North West) where house prices grew by 170%, North Devon (166%) and North Cornwall (165%).

* The rural local authority with the lowest growth in house prices over the past five years is West Oxfordshire where the average house price increased by 48% from £174,874 in 2000 to £257,947 in 2005.

Social Housing: significantly lower than in urban areas

* In rural areas, 13% of the housing stock is social housing compared with 22% in urban areas.

* The rural local authority with the lowest proportion of social housing is Wealden where 7% of its housing stock is social housing.

* The rural local authority with the highest proportion of social housing is Kennet in the South West (25%) followed by Wear Valley (23%), Copeland (22%) and Allerdale (19%).

Second Homes: nearly five times higher than in urban areas

* Second homes account for 1.4% of housing in rural areas. This is nearly five times higher than in urban areas where only 0.3% of the housing stock is second homes.

* The rural local authority with the most second homes is South Hams where 11% of its housing is second homes. This is followed by North Cornwall (8%), South Lakeland (8%) and North Norfolk (7%).

* The rural local authority with the fewest second homes is South Staffordshire where 0.1% of its housing is second homes.

Planning Applications: 56% higher in rural areas

* The number of planning applications per 10,000 head of population is 56% higher in rural areas at 168 compared with 108 in urban areas.

* The Cotswolds and North Cornwall have the most planning applications with 300 planning applications per 10,000 head of population. Uttlesford (East of England) with 263 planning applications and Penwith (South West) with 251 planning applications have the next highest levels of planning applications.

* The rural local authority with the lowest level of planning applications is Copeland (North West) with 105 applications per 10,000 head of population. Pendle (111), South Bedfordshire and High Peak (both 112) have the next lowest levels of planning applications.

Empty Homes: same proportion as in urban areas

* 3% of the housing stock in rural areas is classed as vacant. This is the same as in urban areas.

* The rural local authority with the most empty homes is Rother (South East) with 8% of its housing stock vacant. Torridge (South West) has the next most empty homes (7%), followed by Pendle (North West) with 7% and Hambleton (Yorkshire and the Humber) with 6%.

* The rural local authority with the least empty homes is Vale of White Horse (South East) which has only 0.7% of its housing stock empty.

Unfit Dwellings: similar levels to urban areas

* 3.6% of housing in rural areas is classed as unfit for dwelling in. This is slightly lower than in urban areas where 4.6% of housing is classed as unfit for dwelling in.

* Pendle (North West) is the rural local authority which has the most housing (17%) classed as unfit for dwelling in. After Pendle, the rural local authorities with the most unfit housing are Shepway (10%), West Dorset (9%) and Thanet (8%).

* Unfitness is a more common problem in southern rural England with 8 out of the 10 rural local authorities with the highest proportions of unfit dwellings in the South East, South West and East of England.

* The rural local authority with the least housing unfit to dwell in is South Northamptonshire where only 0.1% of its housing stock is classed as unfit.

Martin Ellis, Chief Economist at Halifax, said: "Housing market conditions are particularly tough for those living in rural areas. Higher house prices combined with lower average earnings mean that property is less affordable than in urban areas. This is making it especially difficult for first-time buyers to get a foot on the property ladder whilst, at the same time, there is less provision of social housing to cater for the needs of those living in rural areas."