Affordable
mortgages are needed for
first-time buyers (FTBs) in rural areas to get onto the housing ladder, as a new report shows that prices there are higher than in towns and cities.
The Halifax English Rural Housing Index shows that the average house price in rural areas is 6.7 times the average annual salary, whereas in urban areas it is only 5.6 times this size.
The index displays the need for mortgages that diminish the gap between people's earnings and the price of properties, as only 24 per cent of
buyers in rural areas are FTBs, compared to 41 per cent in urban areas.
Halifax's chief economist Martin Ellis commented: "Housing market conditions are particularly tough for those living in rural areas.
"Higher house prices combined with lower average earnings mean that
property is less affordable than in urban areas. This is making it especially difficult for first-time buyers to get a foot on the property ladder whilst, at the same time, there is less provision of social housing to cater for the needs of those living in rural areas."
The importance of mortgages in rural areas is shown by the amount of progress rural buyers make on the housing ladder once they have got a foot onto it, with second homes making up 1.4 per cent of all housing there, compared to just 0.3 per cent in urban areas.
Moreover, the ambition shown by buyers in rural areas is also indicated by the fact that the number of planning
applications is far higher there – 168 per 10,000 people, 56 per cent up on the ratio for urban areas.
