Scotland’s rural areas among most affordable to live

RURAL areas in Scotland are among the most affordable places to live in the UK, a report has revealed.

Four of the top ten places where the earnings to house price ratio is at its lowest are north of the Border, according to the report. Picture: Contributed

Four of the top ten places where the earnings to house price ratio is at its lowest are north of the Border, according to an annual report by Halifax.

The report found there are only five rural areas in Britain where house prices cost less than four times local annual earnings – three of them in Scotland.

In Stirling, where a typical property costs £149,838, the average price is 3.4 times that of the typical salary, the study found, followed by East Ayrshire, where the £100,382 cost of a home is 3.5 times the average wage.

The Western Isles and the Shetland Isles also appear in the top ten – with ratios of 3.7 and 4.3 respectively. Copeland in Cumbria was named as the most affordable rural area, where the house price-to-earnings ratio was 2.7.

However, people buying a home in a rural retreat still pay nearly £24,000 more typically than those purchasing a property in a city, the report said. While a “rural premium” exists in every region across Britain, it ranges from £86,218 in the south-east to £11,570 in the north-east.

In Scotland, the difference was 17 per cent, with a rural home typically costing around £160,374 – compared to £137,352 for an urban property.

But the recent wave of first-time buyers into Britain’s property market is helping to close the house price gap between urban and rural properties, the study suggested.

“There is a significant premium on property in the countryside across Great Britain,” said Martin Ellis, housing economist at Halifax.

“Country living remains a widespread aspiration, but relatively high prices put rural homes out of the reach for many.

“Potential first-time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of homebuyers in the countryside than in urban areas.”

In the past four years, however, the gap has been narrowing, with the average price of a home in an urban area rising at five times the rate of one in the countryside, at 10 per cent compared with just two per cent.

Halifax said this could reflect a recent increase in first-time buyers coming into the market to snap up properties.

First-time buyers account for two-fifths of house purchases using a mortgage in rural areas, but in towns and cities they make up more than half of such transactions.

Lenders have been handing out more mortgages in recent months to first-time buyers than in any other period since the credit crunch started.

The average house price in the countryside is equivalent to 6.3 times gross annual average earnings, while in urban areas it is lower and therefore potentially more affordable, at 4.9.

No Scottish regions appeared on the top ten least affordable rural areas in the UK.

The report also analysed the proportion of social housing is districts across the United Kingdom.

East Ayrshire topped the list, with 22 per cent of its properties meeting the criteria for social housing, while Orkney had one of the smallest proportions at just 8 per cent.