00:01 12.09.09

Not for broadcast or publication before 00:01 Hrs on Saturday 12th September 2009

This is the fifth annualHalifax Rural Housing Review. The Review covers Local Authorities in Great Britainwhichare defined as rural areas, according to ONS classifications. The Review uses Halifax house price data to calculate rural house price movements.

RURAL house prices DECLINE by less thanIN urban areas

House prices in rural areas have fallen by less than in urban areas over the past year, according to the latest annual HalifaxRural Housing Review. The average house price across ruralGreat Britain fell by 13% over the past 12 months compared to an average 18% drop in house prices in urban areas. The average rural house price of £203,535is now 21% higher than the average urban house price of £168,376 compared to 15% higher a year ago.

Housing affordability in rural areas improves over the past year

The decline in house prices has improved housing affordability in rural areas. Rural house prices in 2009 are, on average, just oversixtimes average gross annual earnings - the lowest ratio since 2002. However, housing in rural areas remainsmarkedly 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 buyersaccount for more than a quarter of all rural home buyers

27% of all home buyers with a mortgage in rural areasare first-time buyers (FTBs); 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."

OTHER KEY FINDINGS

Rural house prices by local authority

South Oxfordshire is the most expensive rural local authority

The most expensive rural local authority (LA) in Great Britain is South Oxfordshire with an average house price of £307,518; 51% above the GB rural average. Eight of the ten most expensive rural LAs are in southern England2. Craven in North Yorkshire (£253,141) is the most expensiveoutside the south. North Lincolnshire (£122,052) is the least expensive rural LA in Britain.

80% of the least affordable local rural local authorities are in the South West

Eight of the ten least affordable rural areas (i.e. with the highest prices in relation to local earnings) are in the South West. North Cornwallis the least affordable rural local authority with an average house price (£230,459) that is 10.9 times local average earnings (£21,167). Hambleton in Yorkshire- where house prices are 8.3 times average earnings - is the least affordable rural area outside the South West.

Copeland is the most affordable rural local authority

Copeland in Cumbria is the most affordable rural LA in Britain with an average house price (£131,683) that is 4.0 times local average annual earnings. North Lincolnshire (4.2) and East Ayrshire (4.4) are the next most affordable rural areas. All ten of the most affordable local authorities are outside southern England.

Bridgnorth has the lowest proportion of FTBs

Bridgnorth in Shropshire has the smallest proportion of first time buyers (FTBs)in rural Britain with FTBs accounting for just 9% of all buyers -a third of the GB average (27%).In contrast, the WearValley in the North East and Ceredigion in Waleshave the highest proportion of FTBs (both 47%).

North East Derbyshire and Kennet in Wiltshire (both 22%) have the highest levels of social housing in rural England, followed by Copeland (20%).

Ten years

Rural House Prices have risen by 118% in the past ten years

Over the past decade, house prices in rural areas have risen by 118% (£110,132).This is greater than the 111% rise in urban areas over the same period.

Penwith records the largest price rise over the past decade

Four of the ten rural LAs that recorded the biggest house price growth since 1999– including the top two – are in the South West. Penwith recorded the highest house price growth over the period, with the average price in the Cornish rural LA increasing by 234%. North Cornwall (230%) and Craven in Yorkshire(218%) experienced the next highest house price increases.

- Ends -

Table 1: Ten most expensive Rural Local Authorities in Great Britain, 2009

Local Authority / Region / House Prices 2009 (£)*
South Oxfordshire / South East / 307,518
Uttlesford / East of England / 297,636
Horsham / South East / 276,640
Cotswold / South West / 268,695
Craven / Yorkshire and The Humber / 253,141
Hambleton / Yorkshire and The Humber / 238,770
Salisbury / South West / 236,442
Babergh / East of England / 235,707
South Cambridgeshire / East of England / 235,568
West Dorset / South West / 234,879
Rural Great Britain / 203,535

* 12 months to June

Sources: ONS, Halifax House Price Database,

Table 2 Largest increase in rural house prices, 1999-2009

Local Authority / Region / House Prices 1999 (£)* / House Prices 2009 (£)* / 10 Year % change
Penwith / South West / 63,291 / 211,338 / 234%
North Cornwall / South West / 69,895 / 230,459 / 230%
Craven / Yorkshire and The Humber / 79,721 / 253,141 / 218%
Pembrokeshire / Wales / 51,111 / 159,595 / 212%
North Norfolk / East of England / 68,183 / 200,147 / 194%
Highland / Scotland / 55,498 / 160,867 / 190%
Mid Devon / South West / 71,852 / 207,938 / 189%
Carmarthenshire / Wales / 49,922 / 140,998 / 182%
Mendip / South West / 76,708 / 216,375 / 182%
Hambleton / Yorkshire and The Humber / 85,342 / 238,770 / 180%
Rural Great Britain / 93,404 / 203,535 / 118%

* 12 months to June

Sources: ONS, Halifax House Price Database, Halifax estimates

Table 3: Ten Least Affordable Rural Local Authorities in Great Britain, 2009

Local Authority / Region / House Prices 2009 (£)* / Average earnings 2009** / Price to Earnings ratio
North Cornwall / South West / 230,459 / 21,167 / 10.9
Penwith / South West / 211,338 / 24,432 / 8.6
Cotswold / South West / 268,695 / 31,900 / 8.4
East Devon / South West / 221,916 / 26,598 / 8.3
Hambleton / Yorkshire and The Humber / 238,770 / 28,846 / 8.3
North Norfolk / East of England / 200,147 / 24,292 / 8.2
North Devon / South West / 207,663 / 25,498 / 8.1
Mid Devon / South West / 207,938 / 25,688 / 8.1
Salisbury / South West / 236,442 / 30,433 / 7.8
West Dorset / South West / 234,879 / 30,283 / 7.8
Rural Great Britain / 203,535 / 32,421 / 6.3

* 12 months to June

Sources: ONS, Halifax House Price Database, Halifax estimates

Table 4: Ten Most Affordable Rural Local Authorities in Great Britain, 2009

Local Authority / Region / House Prices 2009 (£)* / Average earnings 2009** / Price to Earnings ratio
Copeland / North West / 131,683 / 32,808 / 4.0
North Lincolnshire / Yorkshire and The Humber / 122,052 / 28,816 / 4.2
East Ayrshire / Scotland / 124,091 / 28,015 / 4.4
Rushcliffe / East Midlands / 185,362 / 41,542 / 4.5
Ryedale / Yorkshire and The Humber / 144,841 / 30,635 / 4.7
Newark and Sherwood / East Midlands / 143,175 / 30,066 / 4.8
East Riding of Yorkshire / Yorkshire and The Humber / 147,805 / 30,396 / 4.9
WearValley / North East / 129,697 / 25,957 / 5.0
East Lindsey / East Midlands / 136,113 / 26,325 / 5.2
Dumfries and Galloway / Scotland / 132,593 / 25,570 / 5.2
Rural Great Britain / 203,535 / 32,421 / 6.3

* 12 months to June

** Based on ONS average earnings figures for April 2008, which have been inflated by national average earnings growth to calculate 2009 estimates at local authority level. Earnings figures relate to the average for full-time employees.

Sources: ONS, Halifax House Price Database, Halifax estimates

Table 5: 10 Rural Local Authorities - lowest % of First Time Buyers (FTBs), Great Britain

Local Authority / Region / FTB% share of UK housing market
Bridgnorth / West Midlands / 9%
South Northamptonshire / East Midlands / 11%
Malvern Hills / West Midlands / 13%
East Devon / South West / 14%
Craven / Yorkshire and The Humber / 14%
Castle Morpeth / North East / 15%
South Hams / South West / 16%
Cotswold / South West / 16%
Rother / South East / 17%
RibbleValley / North West / 17%
Rural Great Britain / 27%

Sources: Halifax House Price Database

Table 6: Ten Rural Local Authorities with the Most Social Housing, England 2008

Local Authority / Region / Social Housing as % of All Housing Stock, 2008
North East Derbyshire / East Midlands / 22%
Kennet / South West / 22%
Copeland / North West / 20%
WearValley / North East / 19%
Allerdale / North West / 19%
North Shropshire / West Midlands / 19%
Salisbury / South West / 19%
Alnwick / North East / 16%
Berwick-upon-Tweed / North East / 16%
North Lincolnshire / Yorkshire and The Humber / 16%
Rural England / 13%

Sources: DCLG/ Halifax estimates

Editors' Notes

Figures refer to the arithmetic average of house prices and have not been standardised and covers the 12 months to June 2009

2 Southern England comprises the South East, South West and the East of England

House prices used in this research are arithmetic annual average prices of houses – otherwise known as crude averages - on which an offer of mortgages has been granted. These prices are not standardised and therefore can be affected by changes in the sample from year to year.The data covers the period 1999 to 2009 and has been extracted from the Halifax House Price database.

This analysis was undertaken using the Office for National Statistics (ONS) Urban Rural classification. This classification defines an area as a Rural Area if it lies in a town or village of less than 10,000, or as an urban area if it lies in a town or city of 10,000 or more. A rural local authority is one where the majority of people live in rural areas.

Data on average earnings is based on ONS figures for April 2008, which have been inflated by national average earnings growth to calculate 2009 estimates at local authority level.

The affordability ratio is calculated as average house price divided by the average annual earnings of full time employees.

"This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance."

Halifax is part of the Lloyds Banking Group

Tel: 01422 333829 Fax 01422 333007

Website :

1 of 6

Halifax is part of the Lloyds Banking Group

Tel: 01422 333829 Fax 01422 333007

Website :

1 of 6