City Living vs Country Life

Words by Sophie Chick | @SophieChick

Since the credit crunch we have seen the continued rise of the prime urban markets.

 

City Living

‘Little Londons’ such as Cambridge, Bath, York and Edinburgh have seen price growth race ahead of their neighbouring villages and rural areas. Over the past year, in our outer commuter region - 30-60 minute train journey from London - prime city property values increased by 7.3% compared to those in rural locations, which rose by just 0.8% over the same period.

Closer to London, the commuter towns of Guildford, Sevenoaks and Windsor have been the first to benefit from the ripple effect out of London as towns in our inner commuter region - up to 30 minute train journey from London – saw values increase by 4.0% over the past year, outperforming price growth in both villages and the countryside.

This reflects a change in our attitudes and social behaviours. There is a general reluctance from young families leaving the major urban hubs to abandon their lifestyles completely. Moving to market towns and cathedral cities which offer good transport links, retail and leisure facilities allows them to maintain elements of their lifestyle which they have become accustomed to.

This move can often act as a stepping stone before families take the plunge and move to the countryside or it becomes a permanent move.

We expect the trend for urban living to continue. We have seen the first signs of wealth beginning to flow out of the capital. As the economy continues to recover and the London housing market slows, we predict more London buyers will make the move out to the regions. The prime commuter markets and urban locations are best placed to take advantage of this.

 

TABLE 1

Average house price in top two urban wards by region

 

Source: Savills Research using Land Registry and Registers of Scotland

 

Country Life

Despite the rise of urban living, our survey of people looking to buy a prime property outside London last year found that just one third were looking in urban locations. What’s more, the most popular type of house was revealed to be a rural farmhouse, indicating that the idyllic country life dream is still alive and kicking.

This is just beginning to show in the figures. Across the country, prime property in rural and village locations saw annual price growth of 2.3% and 0.1% respectively over the year to March 2015. However, over the longer term, values still lag behind and remain some way below their previous peak. Prime property values in villages remain -6.5% below their 2007 level, while the countryside is -13.8% below. Urban properties are now 3.6% above peak.

Home movers are often attracted to the country lifestyle, desiring fresh air, privacy and proximity to nature. Rural living also offers more space for families at better value for money. Analysis of Savills data shows that prime rural properties are on average 98.5% bigger than those in city or town locations but on a price per square foot basis are 25.8% cheaper. Villages sit between the two, offering 21.3% more square footage than urban locations at a 7.2% discount.

Although we believe the trend for urban living will continue, villages and rural countryside now represent good value in comparison to larger towns, meaning there is currently a good buying opportunity.

Further down the line, as we move into the next phase of the housing market cycle, the value gap between the prime urban markets and their rural counterparts will begin to close as demand becomes more evenly spread.

 

TABLE 2

Average house price in top two rural/ village wards by region

 
Average house price in top two rural/ village wards by region

Source: Savills Research using Land Registry and Registers of Scotland

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Yolande Barnes

Yolande Barnes

Director
World Research

Savills Margaret Street

+44 (0) 20 7409 8899

+44 (0) 20 7409 8899

 

Lucian Cook

Lucian Cook

Director
Residential Research

Savills Margaret Street

+44 (0) 20 7016 3837

+44 (0) 20 7016 3837

 

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