Welsh Rural House Price Index - Spring 2006: UK Property Shop News

House prices in rural areas are significantly less affordable than in urban areas, according to the latest Halifax Welsh Rural Housing Index. The average property price in rural areas is 6.3 times average annual earnings compared with a ratio of 5.1 in urban areas. There are far fewer first-time buyers (FTBs) in rural areas, accounting for only 32% of all buyers compared with 43% in urban local authorities.

The least affordable rural local authority in Wales is Powys, where the average house price of £168,844 is 6.9 times local average earnings of £24,336 per annum. Denbighshire is the most affordable rural local authority in Wales, with house prices of £133,925 being 5.2 times average earnings of £25,740 per annum. The most expensive rural local authority in 2005 was Monmouthshire, where the average house price was £201,142.

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 6.3 times average annual earnings compared with a ratio of 5.1 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 is Powys, where house prices (£168,844) are 6.9 times average earnings (£24,336 per annum).

* After Powys, the next least affordable districts are Pembrokeshire with house prices being 6.5 times average earnings, Carmarthenshire with an affordability ratio of 6.4 and Isle of Anglesey with a ratio of 6.3.

* Denbighshire is the most affordable rural local authority in Wales where the house prices (£133,925) being only 5.2 times average earnings (£25,740 per annum).

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 32% of all buyers in rural local authorities compared with 43% in urban local authorities.

* The rural district with the fewest first time buyers was Monmouthshire, where first time buyers represented only 21% of the housing market, followed by Powys with 25% of first time buyers and Isle of Anglesey with 26% of first time buyers.

* Gwynedd had the highest proportion of first time buyers (44%), followed by Denbighshire with 36% of the housing market being First Time Buyers and Pembrokeshire with 35%.

Rural House Prices: 20% higher in rural areas

* The average level of house prices for Welsh rural areas is £161,669. This is 20% higher than urban house prices, which average £134,519.

* The most expensive rural local authority in 2005 was Monmouthshire, where the average price of a house was £201,142.

* After Monmouthshire, the next most expensive rural local authorities are Powys with an average price of £168,884, Ceredigion where prices average £164,444 and Isle of Anglesey where prices average £156,580.

* The least expensive rural local authority in 2005 was Denbighshire where the average price of a house was £133,925.

Growth in Rural House Prices 2000-2005: slower than in urban areas

* On average rural house prices grew by 102% in the last five years from £80,172 in 2000 to £161,669 in 2005. This is slower than the 111% rise in house prices in urban areas from £63,861 in 2000 to £134,519 in 2005.

* The rural local authority with the strongest growth in house prices in the last five years was Gwynedd. Here prices rose by 180%, from an average house price of £52,963 in 2000 to £148,299 in 2005.

* Other high growth rural local authorities include: Pembrokeshire, where house prices grew by 165%; Isle of Anglesey, where house prices by 159%; and Carmarthenshire, where house prices grew by 145%.

* The rural local authority with the weakest growth in house prices was Monmouthshire, where the average house price grew by only 121%, from £90,844 in 2000 to £201,142 in 2005.

Empty Homes in Rural Areas: More empty homes in rural areas

* In Rural Areas, 4.4% of housing stock is classed as vacant, compared to urban areas, where 3.8% of housing stock is classed as vacant.

* The rural local authority with the most empty homes is Gwynedd with 5% of its housing stock empty.

* The rural local authority with the fewest empty homes is Denbighshire which has 3% of its housing stock vacant.

Planning Applications in Rural Areas: Significantly more in Rural Areas

* Rural areas have 138 planning applications per 10,000 population, whereas urban areas have an average of 99 planning applications per 10,000 population.

* Isle of Anglesey has the most planning applications with 163 planning applications per 10,000 population. This is followed by Pembrokeshire, which has 158 planning applications per 10,000 population and Carmarthenshire with 148 applications per 10,000 population.

* The rural local authority with the fewest planning applications is Denbighshire with only 115 applications per 10,000 population.

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."