Scotland business

Rural-urban property price gap narrows, says new report

Homes for sale in urban area, home in the countryside. Image copyright Getty/ BBC

The price gap between properties in rural and urban areas is narrowing, according to a new review.

The Bank of Scotland report found that homes in the Scottish countryside are on average £17,231 more expensive than those in towns and cities.

However it also revealed that the price gap has dropped from £24,228 in the last five years.

It found that while prices are higher in rural areas, urban house prices are increasing at a faster rate.

The price of homes in the countryside rose by 14% between 2011 and 2016, while the cost of urban properties jumped 22%.

Other findings of the bank's annual rural housing review include:

  • The most affordable areas for rural homes are East Ayrshire and Dumfries and Galloway;
  • East Lothian and Perth and Kinross were the least affordable regions;
  • First-time buyers account for 45% of all mortgage-financed purchases in Scottish rural areas;
  • Getting on the property ladder is most challenging in East Lothian - there, just 37% of purchasers are first time buyers.

Graham Blair, mortgage director at Bank of Scotland, said: "Our How Scotland Lives research has shown that countryside living can have a positive impact on peoples' happiness, so it's to be expected that people will be attracted to living in the countryside and this does come with a premium.

"Affordability is often a key driver in any decision to purchase a home, with some rural regions more affordable than certain urban locations there are options for anyone considering an escape to the country."

Affordability of homes in rural districts
Local Authority District House prices 2016 (£) Average earnings 2016 Price to earnings ratio
East Ayrshire 127,646 29,979 4.3
Dumfries and Galloway 133,462 28,960 4.6
Western Isles 129,547 27,557 4.7
Moray 161,887 30,543 5.3
Argyll and Bute 163,263 30,397 5.4
Shetland 181,822 33,311 5.5
Scottish Borders 167,215 30,594 5.5
Highland 171,956 31,380 5.5
Aberdeenshire 222,668 39,900 5.6
Perth and Kinross 186,512 32,614 5.7
East Lothian 200,991 32,611 6.2
Rural Scotland 181,233 32,763 5.5
Urban Scotland 164,002 33,299 4.9

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