Homes in rural areas in Great Britain are on average £46,575, or 26%, more expensive than in urban areas, according to recent research from Halifax.

This rural house price premium can be found in all areas, although it differs significantly across the country. The rural premium is apparently greatest in the West Midlands at £88,781 (57%) compared to £17,570 in the North East (13%).

The gap between rural and urban housing appears to be narrowing however, with property prices rising more slowly in rural areas during the past five years.

Between 2009 and 2014, the average price of a home in the countryside rose by 12% compared with an average increase of 18% in urban areas. Between 2013 and 2014, the average price of a home in the countryside has risen by 8% compared with an average 10% increase in urban areas (excluding exclude Greater London).

The research also found that first-time buyers account for only 42% of all mortgage financed purchases in rural areas, compared to more than half (54%) in urban areas.

Halifax explains that the recent outperformance of house prices in urban areas partly reflects the relative strengthening of the first-time buyer market in the last few years. Since 2010 there has been a significant increase in the number of first-time buyers, and this group typically represents a larger proportion of the market in urban areas.  

“It typically costs significantly more to buy in rural areas, with a substantial premium existing in all the regions of Great Britain,” commented Martin Ellis, housing economist at Halifax. “This reflects the aspiration of many to own a property in the countryside.”

“The relatively high prices, however, put rural homes out of the reach for many, particularly the young,” he added. “This is reflected in first-time buyers accounting for a smaller proportion of homebuyers in the countryside than in urban areas."

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