A home in rural area costs almost £20,000 more than in a town or city in Scotland
Living in the countryside costs home owners almost £20,000 more in Scotland on average and as a result few first time buyers choose to do so. Overall the premium for buying in a rural area is an average of £19,017 but the premium is less than it was five years ago, according to new 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% or £27,354 in 2012 to 11% or £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% and East Ayrshire is the most affordable rural area in Scotland with an average house price of £128,864, some 4.1 times the local average annual earnings of £31,322.
Dumfries and Galloway is the second most affordable rural district, with an average house price of £135,313, some 4.6 times the average earnings of £29,662 then the Western Isles with an average house price of £132,353 and 4.8 times earning and the Shetland Islands at five times earnings.
The research also shows that the least affordable rural local area districts in Scotland are East Lothian at 6.5 times average earnings and Perth and Kinross at 5.9. The Scottish countryside premium of 11% compares more favourably to Britain with home buyers nationwide paying a premium of over £44,000 or 20% to live in the countryside. The greatest rural premium is in the West Midlands at 47% followed by the North West at 33%.
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 51% of such purchases. Affordability is the key factor behind the lower level of first time buyers in rural areas, the report points out. Getting on the rural property ladder is at its most challenging for first time buyers in Perth and Kinross where they account for only 36% of buyers and East Lothian, the Scottish Borders and Argyll and Bute all at 38%.