Country life proves lucrative after prices rise by £665 a month

Countryside property prices rose by an average of £79,819 – equivalent to £665 per month – from £79,104 in 2001 to £158,923 in 2011.

While property prices generally have fallen since the credit crunch put a squeeze on mortgages and high unemployment deterred people from moving up the housing ladder, the housing boom of the early to mid 2000s inflated property values significantly.

East Ayrshire is the least expensive rural area in Britain according to the report, with an average property costing £103,981.

In Aberdeenshire, the most expensive area, wealthy oil workers looking for a home in the countryside around Aberdeen pushed prices 25 per cent above the Scottish rural average of £158,923 to £198,970.

Nitesh Patel, housing economist at Bank of Scotland, said: “Living in the countryside is an aspiration for many homeowners, attracted by the prospect of a better quality of life, open space and a cleaner environment. This ideal for a life in the country has come at a cost, with house prices doubling in value over the past decade in Scotland – more than in urban areas.

“However, for first-time buyers, the average price has risen by even more, limiting their prospects for getting on the housing ladder.”

Five rural areas north of the Border saw average property prices more than double over the last decade.

The largest increases were in Moray, where the cost of the average home rose by 162 per cent, followed by Aberdeenshire, the Highlands, and Dumfries and Galloway, where prices rose by 110 per cent.

The report also revealed that a third of all property transactions in rural areas are accounted for by first-time buyers compared with just under a half in urban areas.

The lowest share is in the Scottish Borders, where sales to first-time buyers account for just 28 per cent of all transactions.

First-time buyers pay more for properties in rural areas than in cities north of the Border – with the average house price over the decade coming in at £113,714, compared to £105,495 in an urban location.

Although Aberdeenshire is the most expensive, the Highlands is the least affordable rural area in Scotland – in terms of the differential between the cost of property and average earnings – with an average house price coming in at 5.7 times the local gross annual average wage.

The price-to-earnings ratio for all rural areas is 5.0 – compared with an average of 4.2 for urban areas.

Graeme Hartley, director of Royal Institute of Chartered Surveyors Scotland, said the majority of the rise came pre-recession, but said cash-strapped would-be home owners were still feeling the effects.

“House prices have fallen or stalled in recent years but the price escalation in 2003-7 will have contributed significantly to house prices doubling overall in the past ten years,” he said.

“Demand from workers in Aberdeen’s oil industry, city dwellers wanting more for their money and Londoners looking for a second home will have contributed to this rise.

“During the property boom, when banks were lending buyers up to five times their salary, but now that lending has cooled, first-time buyers need to save a large deposit in order to get on the property ladder – especially in some rural Scottish areas.”