In the first quarter of this year, a fifth of rural homes in England and Wales sold for more than their asking price. This is the lowest proportion since 2020 and is down from 23% last year and a high of 35% in 2022 when the effects of the stamp duty holiday and the pandemic race for space were still being felt.
Country homes are also currently taking an average of 85 days to sell, 10 days longer than last year and up from a low of only 35 days in 2022.
City markets have generally always outperformed on both these measures since 2009, predominantly due to the type of home up for sale. However, while the share of homes selling above their asking price has fallen in the countryside, the figures have stayed stable in cities over the last year. In the first quarter of 2024, 27% of urban properties sold for more than the asking amount. This is the same percentage as in 2023 but is nevertheless down from 42% in 2022. Properties in cities are now taking an average of 70 days to sell, 12 days longer than last year and up from 34 days in 2022.
At present, city homes are also more likely to attract bidding wars, with 61% of homes that changed hands in urban areas so far this year selling after receiving offers from two or more buyers. In the countryside, 45% of homes sold so far in 2024 were the subject of bidding wars, down from 61% in 2021 when the gap between rural and urban markets narrowed.
It’s important to note that higher mortgage rates have weighed on the entire housing market, in both city and country, and the increase in the time taken for homes to sell is also partly down to the fact that homes that sat on the market last year are now beginning to transact.
Price-wise, however, the lingering effects of the race for space mean rural home values have held up better in recent years. By the end of 2023, the average countryside home in England and Wales cost £450,970. While this is a fall of 1.4% compared to a year earlier, rural property prices are still 27% higher than they were in 2019, pre-pandemic, and are up 50% over the past decade.
By contrast, the average urban home in England and Wales costs £423,710, 1.9% less than it did at the end of 2022 but 18% more than in 2019. Over a decade, city home prices are up 33% and they are 71% higher than they were in 2008.
Some countryside locations have bucked the trend, with the top 10 local authorities with the highest price growth since 2019 dominated by affluent locations that have significant lifestyle appeal. Many of these are located in the North of England, where property prices have risen more over the last few years which is typical second half of the house price cycle behaviour.
Over the past year, prices in Rutland, England’s smallest county, rose 6.5% to an average of £393,750, which means that values are now 28% higher than in 2019. Values in the Malvern Hills, the second-best performer, are also up 28% compared to pre-pandemic and rose 5.5% in the past year to an average of £341,210.
West Oxfordshire comes third, with year-on-year price growth of 4.7% to £402,630. This means average values are now a quarter higher than before Covid.
The worst 10 country performers include less affluent areas such as West Lindsey and South Holland, both in Lincolnshire and which saw annual values fall 1.7% and 1.3% respectively.
The bottom 10 also includes more affluent locations, such as Tonbridge and Malling in Kent (-1.1%) and Uttlesford in Essex (-0.6%). In both cases, higher interest rates are likely to have weighed on buyers’ affordability.
Prices in all the bottom 10 locations are nonetheless still significantly above 2019 levels – in Tonbridge and Malling, they are 18% higher, and in Uttlesford they are 20% higher.
The Welsh locations of Ceredigion and Pembrokeshire, which were popular with second-home buyers during Covid and which have seen values fall slightly in the past year, still boast property prices that are more than a third (34%) higher than in 2019.
