Living in the countryside costs home owners an average of £19,017 extra
East Ayrshire is the most affordable rural area in Scotland
Fewer first time buyers choose to purchase rural locations
Properties in the Scottish countryside are, on average, £19,017 (11%) more expensive than in urban areas, according to research from the Bank of Scotland.
Between 2012 and 2017, the average price of a home in the Scottish countryside rose by 17% compared with an average increase of 27% in urban areas, resulting in the premium that home owners pay for living in the country falling from 21% (£27,354) in 2012 to 11% (£19,017) in 2017.
However, over the past year the rate of growth for both urban and rural areas has been the same at 2%.
The Scottish countryside premium of 11% compares more favourably to Great Britain (exc London), with homebuyers paying a premium of over £44,000 (20%) to live in the British countryside. The greatest rural premium is in the West Midlands (47%), followed by North West (33%). (See table 1)
The most affordable rural local area district in Scotland is East Ayrshire with an average house price of £128,864 - 4.1 times the local average annual earnings1 of £31,322. Dumfries and Galloway is the second most affordable rural district, with an average house price of £135,313 - 4.6 times the average earnings of £29,662. The Western Isles follows with an average house price of £132,353 (4.8) and then the Shetland Islands (5.0).
The least affordable rural local area districts in Scotland are East Lothian (6.5) and Perth and Kinross (5.9). (See table 2)
Fewer first-time buyers in rural areas
First-time buyers account for 44% of all mortgage financed purchases in Scottish rural areas. This is lower than in urban areas where first-time buyers account for half (51%) of such purchases. Affordability is the key factor behind the lower level of first-time buyers in rural areas.
Getting on the rural property ladder is at its most challenging for first-time buyers in Perth & Kinross where they account for only 36% of buyers and East Lothian, Scottish Borders and Argyll and Bute (all 38%). (See table 3)
Graham Blair, Mortgages Director at Bank of Scotland, said: "The countryside continues to attract homeowners looking for open spaces, cleaner environment and the prospect of a greater quality of life. However, this comes at a premium with rural property prices on average 11% higher than in urban areas.
“Affordability is often a key driver in any decision to purchase a home, with some rural regions more affordable than certain urban locations, so there’s always an option for anyone considering an escape to the country.”