North rural house prices fall less than cities

Sep 12 2009 by Brian Daniel, The Journal

HOMEOWNERS in Northumberland and Durham received a welcome boost last night with news that rural house prices fell much less than those in towns and cities.

Halifax’s annual rural housing survey showed that despite the recession and the credit crunch homes in the countryside around the North East still fetched on average £203,535 when sold.

And although this shows a 13% drop over the last year, city families will have seen prices lose more than 18%.

House prices in Northumberland and parts of Durham have fared much better than city homes which now bring in an average price of £168,376.

Last night estate agents in Northumberland said they were not surprised by the report’s findings and said they always expected the countryside to stand up well against the worst of the recession.

Justin Mathews, branch manager at Your Move Estate Agents on Alnwick’s Bondgate Within, said: “We have been selling more properties than our other branches of Your Move in the Newcastle area.

“It probably is bucking the trend. Year on year, we have done roughly about 70% more sales than this time last year.

“And I think it is more to do with a much wider variety of property in rural properties.

“Then that helps to get a different variety of buyers.

“We are getting buyers who are all relatively affluent buying holiday homes in the area.

“These are people who would normally have money sitting in the bank but they are not getting the interest in the bank so they are looking to invest it in property again.

“You get better value in the rural areas than you would in the towns and cities.

“We are getting a lot of people that would have lived in towns and cities that are now living in the rural area.”

But housing experts have warned the downside of the property success in the countryside is still less affordability.

First-time buyers accounted for 27% of all homes bought with a mortgage in rural areas during the year to the end of June, the highest proportion since 2000, but still down on the 44% of buyers in urban areas who were taking their first step on to the property ladder.

The affordability problem in rural areas is made worse by less social housing, with these properties accounting for only 13% of rural housing stock.

Castle Morpeth has a particularly bad record when it comes to attracting first time buyers, while Alnwick, Berwick and the Wear Valley were in the top 10 rural local authority areas with the most social housing in 2008.

The Wear Valley was also in the top 10 most affordable rural local authorities for 2009.

The report comes as the Home Builders Federation’s latest survey shows that July’s new homes reservations were up strongly on a year ago, the fourth successive month of year on year growth – and that builders expect a rise in their new homes sales in 2009.

Suren Thiru, economist at Halifax, said: “Homes in rural areas continue to command a marked premium over urban locations, partly reflecting the quality of life benefits that many people associate with living in the countryside.”