Rural Property Prices Outperform Urban Areas in Pursuit of More Space
A recent study has shown a 22 percent increase in property prices in British rural areas, surpassing the 5 percent growth in urban areas.
The analysis, conducted by Nationwide Building Society, revealed that rural property values have risen by 22 percent in the past five years, compared to a 17 percent increase in urban areas during the same period.
Nationwide’s senior economist, Andrew Harvey, stated, “Average house price growth in predominantly rural local authorities has consistently outpaced other areas.”
He further elaborated, “Average prices in predominantly rural areas saw a 22 percent increase, while predominately urban areas experienced a 17 percent growth. Urban areas with significant rural presence also saw a 19 percent increase in prices.”
Harvey pointed out that affordability challenges and rising borrowing costs led to a slight decline in average prices in both rural and urban areas in 2023.
The data in the report was sourced from the UK House Price Index and covered the period from December 2018 to December 2023.
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More than half of the population in predominantly rural local authorities reside in rural settlements or market towns, according to Mr. Harvey.
“Between 26 percent and 49 percent of the population in urban areas with significant rural presence live in rural villages or market towns,” he explained.
He also noted that in predominantly urban local authorities, at least 75 percent of the population reside in towns or cities.
The report highlighted popular tourist destinations like Devon and the Lake District, indicating potential buyers investing in holiday or second homes.
Out of the 349 local authorities in Britain, 212 are primarily urban, 89 are predominantly rural, and the remaining 48 are urban with significant rural presence.
In terms of property types, rural semi-detached properties showed the highest price growth, with average prices rising by 24 percent.
“The increased demand for rural properties in recent years is a result of the ‘race for space’ trend observed during the pandemic,” mentioned Mr. Harvey.
The flexibility of remote work arrangements necessitated by the COVID-19 pandemic prompted many urban residents to relocate during this period.
However, a recent study by the Centre for Cities revealed that London’s population has started to recover and reach record highs.
Between mid-2019 and mid-2021, London experienced a 0.7 percent decrease in population, with over 75,000 individuals leaving the city, equivalent to the population of Tunbridge Wells.
Most of the individuals who left London relocated to southeastern England around the time of the pandemic, although the outflow was considered modest by researchers.
“The population decline during COVID was less significant than initially expected,” stated Andrew Carter, the chief executive of Centre for Cities.
By mid-2022, there was an influx of 66,000 individuals moving back to London, with boroughs like Camden and Tower Hamlets experiencing a population surge surpassing pre-pandemic levels.
Considering record levels of immigration, London’s population is likely higher than before the pandemic.
The think tank highlighted how immigration significantly contributes to the housing crisis, impacting rental and social housing costs in the UK.
Karl Williams, the research director at CPS, emphasized the urgency for the UK government to address the housing deficit through comprehensive house-building efforts across different regions and types of land.
