When buying an urban property, there are numerous key factors to consider. You need to think about the geographical location of the property, the parking situation, public transport options, and the nature of the neighbourhood.
Size is, of course, a consideration but it’s not always the be all and end all of urban homes. In rural areas, it’s a different story. Due to the limited nature of rural property, it is not quite as susceptible to market forces as its urban equivalent.
That means that because there isn’t as much rural property on the market (and even less being built) the demand is always greater. For proof of this, you only need to look at the most recent house financial crisis when rural property suffered smaller drops and quicker recoveries.
However, the flip side of this is that rural properties rarely perform as well as urban in booming markets. Rural house prices have risen only 2% in the last four years compared to 10% for urban properties.
Why bigger is better
Thanks to what is known as the ‘River Cottage effect’ rural properties often have added appeal thanks to the nature of their surroundings. This means that while growth maybe slower in rural areas, the lack of supply still keeps property prices high – specifically for larger, more desirable homes.
Comparing the price of a four bedroom property in a rural postcode with that of an urban equivalent shows that rural homes are on average 8% more expensive.
That’s because most buyers looking for a four-bed home expect there to be land and space accompanying the property. The high demand for these larger, family style rural homes means prices remain high. And the bigger you go, the better.
The reverse is also true. The smaller you go in the countryside, the cheaper it is. One, two and even three bedrooms properties outside the city are almost 20% cheaper on average. These make up the majority of buy to let investments in the city, keeping prices relatively high. But investing in rural areas for smaller properties won’t see the same return.
The social, transport and work difficulties in rural areas means it is harder to rent smaller properties. Young professionals, young families and students seldom require these kinds of homes, which means rental yields are low in rural areas compared to their city equivalents.
Rental income for larger properties increases disproportionately in the same way that purchase prices do, making larger properties more financially viable for rental as well as sell on value.
So, as you can see, size really does matter.
To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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