According to Nationwide Building Society house prices in rural areas have seen the strongest house price growth over the last five years to the end of 2023.
Property prices have risen by 22% in rural areas and urban areas have seen a 17% increase in values.
Andrew Harvey, Nationwide’s senior economist, said, “Our latest analysis suggests that average house price growth in local authorities classified as predominately rural has continued to outpace those of other areas.
“Between December 2018 and December 2023, average prices in predominately rural areas increased by 22%, compared with 17% in predominately urban areas.
“Local authorities classified as ‘urban with significant rural’ saw price growth of 19% over the same period.”
He added, “Average house prices across both urban and rural areas declined a little overall during 2023, which reflects the rise in borrowing costs, which have added to affordability pressures.”
He continued, “Increased demand for properties in rural areas over recent years has been part of the ‘race for space’ seen during the pandemic.
“However, it is actually rural semi-detached properties that have seen the strongest price growth between December 2018 and December 2023, with average prices increasing by 24%.”
David Fell, lead analyst at Hamptons, said: “In what’s a cash-intensive business, house builders typically borrow to build homes, paying it back when they’re sold.
“But with more homes only sold after they’re finished, it means developers are borrowing money for longer and at higher interest rates.”
He added, “Higher mortgage rates have introduced a new barrier in the form of unaffordable repayments and have pushed buyers towards smaller, more affordable homes that are often second-hand.”
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