Scottish rural house prices up by £180 a week

Rural homeowners have seen the value of their property more than double over the past decade, according to research by the Bank of Scotland.

Based on Bank of Scotland's own data, the average house price in rural Scotland rose by 130% (£93,561) from £71,872 in 2000 to £165,433 in 2010 - equivalent to a weekly increase of £180. The rise in rural house prices was greater than the increase in property prices in urban areas (112%). The average rural house price is now 20% higher than the average urban house price compared with 10% higher in 2000.

Scotland sees the biggest rise in rural house prices in Great Britain since 2000.

Scotland saw the biggest increase in rural property prices (130%) in Great Britain over the past decade, followed by Yorkshire and the Humber (123%). However, Scotland did record the largest rural house fall in Britain over the past year (-2.1%).

Rural homes fared better during the downturn

House prices in rural areas experienced smaller house price falls during the recent downturn in the housing market. Rural property prices fell by 8% between 2007 and 2009 compared with a 14% drop in urban areas.

Rural housing affordability has deteriorated in the last ten years

Rural housing affordability has deteriorated in the last ten years. Rural house prices in 2010 are, on average, 5.5 times average gross annual earnings. This is up from 3.4 times average earnings in 2000, but lower than the 6.7 multiple in 2007. Rural housing remains less affordable than in urban areas where average prices are 4.6 times average annual earnings.

Far smaller proportion of first-time buyers in rural areas

There are significantly fewer first-time buyers in rural areas, accounting for 30% of all buyers compared with 43% in urban areas.

Suren Thiru, housing economist at Bank of Scotland, said: "With the lifestyle benefits associated with residing in the countryside still resonating with homebuyers, rural properties continue to trade at a significant premium to homes in urban areas. However, as a consequence of faster rising property prices and generally lower average earnings, rural homes have become more unaffordable over the past decade, particular for those looking to get on the property ladder."