'Urban flight' raises house prices in villages

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image captionMore isolated homes have become popular

Evidence of urban flight - with workers moving out of cities to towns and villages - is among the reasons for house price rises in rural areas, a think tank has said.

Property values in less densely-populated areas have risen almost twice as fast as in urban hubs, the Resolution Foundation has said.

The pandemic has prompted a search for space, both inside and outside homes.

But the think tank said many people were still living in overcrowded homes.

Various surveys have shown increases in demand for properties in areas such as Cornwall, and rises in prices as a result.

High demand from buyers has led to accelerating price growth in general across the UK.

The Resolution Foundation said that since February 2020, prices had gone up by more than 10% in the least densely populated 10th of local authorities in the UK, compared to rises of 6% for the most populous deciles.

Its housing outlook report also suggested smaller, more limited properties - such as flats - had become less attractive to buyers when compared to more spacious homes.

Temporary stamp duty holidays had boosted the purchasing power of movers rather than first-time buyers, allowing them to look to buy larger properties.

But the think-tank, which focusses on people on lower incomes, said it was too early to tell whether these trends seen during the pandemic would continue in the long-term.

It warned that there were one-in-five children in low-income households who spent the first lockdown in an overcrowded home, and people of all age groups were more likely to live in overcrowded conditions now than they were 20 years ago.

Cara Pacitti, economist at the Resolution Foundation, said: "For many families, escaping to the country is no more than a pipe dream, and the overcrowding that they have faced during the pandemic must be addressed."

Chancellor Rishi Sunak has told MPs that the government's intervention in the housing market during the pandemic supported the wider UK economy.

He said the extension to the stamp duty holiday announced in the Budget was "to smooth the transition back to normal".

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