Assetz® News - A right rural premium

A right rural premium

10th October 2008 |

At a time when house prices are falling it may be interesting to note where and in what circumstances they may be bolstered.

One acknowledged factor is of course location. There have always been more fashionable areas and estate agents have always been quick to emphasise how any given home is near to good amenities, be these shops, train stations or the wide open green spaces.

This much may seem a no-brainer, but the exact extent of the advantage a property may get from having one of these geographical attributes is perhaps worth examining. New research by Halifax Estate Agents has set out to do that.

One finding has shown, as previous research has done, that being near a good school can add value to a home. On average, the premium is nine per cent, the survey found. But what is also apparent from the research is that other factors make an even bigger difference. Homes near shops, restaurants and coffee bars attract a 13 per cent premium. Being near good transport links is worth 15 per cent and locations near workplaces gain by 17 per cent.

But the biggest influence of all is being near the countryside. This factor adds an average of 23 per cent to a home. By definition, this will make homes most desirable - and expensive - on the edge of major conurbations, in small towns or of course in rural areas themselves.

Of course, all this is subject to regional variation and all other things being equal. After all, in the case of London, most homes are as far from the countryside as it is possible to be and yet central London has some of the costliest real estate around. The difference here may be the predominance of other factors. Halifax found that the proximity to transport links was the most important factor cited by respondents (accounting for 24 per cent of replies), which of course London - particularly in central areas - has plenty of. Equally, the countryside factor was most prominent in Wales and the east of England, being the number one consideration for 42 and 37 per cent of respondents respectively in these largely rural regions.

Overall, however, all but three regions saw the countryside as most important, with the Scottish preference for the closeness to amenities perhaps reflecting its high level of urbanisation and very low rural density (proximity to work was the key factor in the West Midlands, dominated by Britain's second largest conurbation).

The managing director for Halifax Estate Agents, Gordon Edwards, said: "Location and lifestyle factors are essential in the home buying decision process. Although other factors such as budget, property specification and availability play an important part, most people begin their search for a home by looking at geographic location first."

Of course, whether people want to spend this money depends if they can get it to start with. But Halifax's latest house price figures suggest the situation may be getting better. In the year to August 2008 the average annual mortgage interest repayment rate fell from 5.91 per cent to 5.83 per cent and between July 2007 and July this year the price to income ratio dropped from 5.84 to 5.02, the lowest since February 2004.

With interest rates falling and affordability improving, it could be that more people will soon be able to go in search of that ideally located property.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4425.html. Alternatively, please see our full press release archive.