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Rural homes command a premium price

Monday, 26 September 2011 1:11 PM

House hunters need to earn 42 per cent more to buy in a rural area compared to an urban one, says a study by property analytics company Hometrack.

Buyers need an income of £46,500 to get on the first rung of the housing ladder in the country – more than the £42,475 threshold for higher rate income tax. That compares with £32,750 in towns and cities.

Hometrack says the rural-urban divide applies across all regions of England and Wales. The income gap to buy a lower quartile priced home is biggest in the West Midlands, where buyers need £46,000 in rural areas and £29,000 in towns and cities.

A shortage of supply and increasing demand explains the high cost of rural housing are set to increase the gap.

Richard Donnell, director of research at Hometrack, said: “Those working in the countryside, frequently find themselves competing for homes with commuters working in nearby urban areas, retired households and second home owners, all of whom are less reliant on mortgage finance.

“Add to this a relative under-supply of smaller sized properties and lower turnover levels and it is easy to see how the scarcity of housing is keeping prices relatively high.”

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