The increase in house prices in predominantly rural areas in Wales compared to urban areas could be down to the buying of holiday or second homes, a report has found. According to Nationwide Building Society, prices for rural properties have risen by 29% over the last five years, while prices for urban properties have risen by 18%.
The report also noted that 13 of the top 20 local authorities for house price growth in 2021 were classed as 'rural' in the UK, and included Welsh counties Ceredigion, Pembrokeshire and Vale of Glamorgan. The county of Ceredigion, which the average house price recorded in December 2021 was £244,619, saw the biggest increase in Wales with 21%. This was just above the London area of Camden, which saw a 20% increase and has average house prices from around £947,511.
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Alongside the English counties of Hastings and South Norfolk, Pembrokeshire saw a 19% increase in the last five years, which as a result, saw the average house prices in the county around £231,355. The Vale of Glamorgan was categorised as 'urban' and saw a 18% price increase, with average house prices around £287,199 in December of last year.
The report also noted that rural detached properties had seen strongest rates of price growth while urban flats saw the weakest. According to a leading economist, the increased demand for properties in specific areas may have been due to those buying holiday or second homes.
Commenting on the figures, Andrew Harvey, a Senior Economist, said: " It is notable that the list features a number of areas closely associated with tourism, including parts of Devon, South Wales, the Cotswolds and the Broads.
"This suggests some of the demand may be being driven by those buying holiday or second homes. Indeed, ONS data suggests that the rate of second home ownership is significantly above average in areas such as South Hams, Pembrokeshire and Ceredigion, areas which are amongst those seeing the fastest rates of growth."
The report used the Office for National Statistics' broad rural urban classification, which looks at the proportion of the population in local authorities living in different area types. In local authorities classed as ‘predominantly rural’, more than half of the population live either in rural settlements or market towns. In authorities classed as ‘urban with significant rural’, between 26% and 49% of the population live in either rural villages or market towns. In ‘predominantly urban’ local authorities, 75% or more of the population are either in towns or cities.
Of the 362 local authorities in Great Britain, 212 (59%) are classified as predominately urban, 98 (27%) as predominately rural, while the remaining 52 (14%) are classed as urban with significant rural. The south west of England has the highest proportion of rural local authorities with nearly 60% being predominately rural, while London had none.
