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Rural county house prices are 10 times annual earnings

Words: Laura Edgar
Rural village / Shutterstock_422928433

House prices in rural counties are 10 times higher than average annual earnings, according to analysis by the County Councils Network (CCN).

Based on the UK Housing Price Index for December 2018, the analysis suggests that in some shire counties house prices are 14.5 times higher than the average annual wage. This compares with a national average of 8.2.

The representative body for county councils says the analysis highlights how the affordability crisis has spread from London to hit counties, where wages are lower. The average house price in the country’s 27 counties is £100,000 more than in urban areas outside of the capital.

A “fragmented” planning system is holding back development in county areas, pushing up house prices, say county council leaders, and it is compounded by annual wages in those areas being £1,700 lower than the national average. While district councils are responsible for planning and housing in two-tier county areas, the county council in each of those areas is responsible for the infrastructure for these developments – such as parks, roads, public services, and amenities. County leaders want to work in closer collaboration with district partners to deliver more homes.

The counties with the largest house prices to yearly wage ratios include Cambridgeshire (14.6), Surrey (14), and Hertfordshire (12.8). The ratio has widened since 2016, when Oxford Economics did a similar survey for the CCN.

The organisation notes that the top five urban areas outside London are Southend (10.5), Bristol (9.6) and Bournemouth. Nine out of the 27 county council areas have a ratio that is below the national average with the average house price in rural areas now £270,923, up from £262,390 in 2017. The average house price in the cities and towns is £170,212.

Strategic planning was scrapped in 2012, but county leaders want to see it return. CCN chairman Paul Carter has called for strategic powers for counties and stronger planning reform – including reforms to developer contributions – from the government.

Philip Atkins, CCN spokesman for housing, planning, and infrastructure, and leader of Staffordshire County Council, welcomed the government's “drive” to tackle housing affordability but said “bolder change” is needed to deliver the homes the country needs.

“If we are to build the right homes, in the right places, with the necessary infrastructure, then we need to move towards strategic planning on a county scale, working with district partners and neighbouring authorities.

“To that end, we recommend that rural areas have the same planning powers that are currently only on offer to urban metro mayors, such as allowing them to prepare their own strategic plans, to help deliver more houses in England’s counties. At the same time, we would encourage more ‘Housing Deals’ outside of city areas. A closer alignment of planning and coordinated infrastructure provision across a county-wide geography will enable us to overcome the current fragmented approach to the planning system and build more homes and genuinely sustainable communities.”

He added that there is a lack of adequate funding for roads, amenities, and public services to mitigate large-scale development which forms a barrier to unlocking development in some areas.

"Further reform to developer contributions and the way that this funding is distributed between councils is needed.”

Image credit | Shutterstock