Scarce supply making rural property unaffordable, says Hometrack

A shortage of supply combined with increasing demand is making property unaffordable for first-time buyers in rural areas, according to Hometrack.

The property analytics firm says that only higher rate tax payers can afford to buy housing in rural areas, and the cost of getting onto the property ladder is 42% higher in rural areas compared to urban.

Research from Hometrack shows that income of £46,500 is needed to get on the property ladder in a rural location, compared to £32,750 in an urban area.

Furthermore, the data shows just 12% of all homes that are built are in rural areas.

Richard Donnell, director of research at Hometrack, says: “While there is general acceptance that more homes need to be built, our analysis is not suggesting more development in rural areas.

“What is needed is greater consensus on how best to meet the requirements of those who live and work in local housing markets.”

He says that those who work in the countryside struggle to get on the housing ladder because they face tough competition from commuters and second-home owners, with high demand and low supply pushing prices up beyond their reach.

Donnell says: “Those working in the countryside frequently find themselves competing for homes with commuters working in nearby urban areas, retired households and second-home owners, all of whom are less reliant on mortgage finance.

“Add to this a relative under-supply of smaller sized properties and lower turnover levels and it is easy to see how the scarcity of housing is keeping prices relatively high and out of the reach of many first-time buyers.”