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Property boom in rural Britain

5th January 2006 | back to article listings BACK    print this article PRINT

Experts are predicting that rural property prices will shoot up in 2006, with wealthy city dwellers keen to purchase country retreats.

A strong year is also expected for houses at the top end of the market, with a record year of City bonuses already beginning to impact upon property investment in London and its surrounding areas.

Country Life magazine predicts that the majority of prime property hotspots in 2006 will be found outside London, as a definite trend develops among London's highest-earners. Status undoubtedly plays a large role in this phenomenon as city slickers exploit the possibilities of much larger properties in areas such as Gloucestershire, Buckinghamshire and Wiltshire.

A recent report from the Warwick Medical School and Portsmouth and Bristol universities has also pointed to the psychological benefits of owning a country retreat. Where it was once thought that the isolation of rural life could cause mental health problems, the new study has found that living in the city is more psychologically damaging than living in a rural area.

"There are small but statistically significant differences in rates of common mental disorders between urban and rural residents," said the report, concluding that rural residents had a slightly better mental health than their non-rural counterparts.

Significantly, nine of the top 12 towns likely to be in most demand this year are outside of the capital, as City workers opt for greener areas within a commutable distance of London. Wiltshire, Kent, East Sussex, Dorset, Buckinghamshire and Gloucestershire are all likely to see notable price increases as a result of this development.

Many London property investors will see this as an opportunity to make significant gains, with buy-to-let one of the options available.

Residential Landlord has said 2006 will be a strong year for buy-to-let investment throughout the UK and it cites Landlord Mortgages' managing director Lee Grandin.

"The health of the buy-to-let market in 2006 hinges on the Bank of England's stance on interest rates. We are currently seeing a vibrant market, which is being driven by high levels of consumer demand as well as the opportunity for landlords to borrow money relatively cheaply," said Mr Grandin.

In addition to commuters, it seems that more and more UK residents are finding they can afford to invest in a second home in the country. The second home market is expected to boost house building in the coming years, as the UK continues to compete with other popular locations including France and Spain.

A government commission is currently looking into the possibility of limiting second home purchases in the Lake District, but a group has been formed to campaign against any proposals, with over 100 members already committed to the cause.

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