Why rural house prices are increasing faster than urban properties since covid

House prices in the countryside have been rising far faster than those in towns and cities since the onset of the pandemic, according to a detailed analysis by Nationwide. Their findings reveal that rural property values have jumped by 23 per cent since 2020, compared to an 18 per cent increase in urban areas during the same period.

The trend began during the so-called “race for space” that followed the first national lockdown when families sought roomier homes in less densely populated areas. The appeal of village life, alongside the desire for larger gardens and a stronger sense of community, has led to a marked shift in buyer preferences. Nationwide’s research indicates that one in ten moves from cities in the past five years has been to rural areas, reflecting a growing demand for village life.

Not all countryside properties have risen equally. Last year, Tewkesbury in Gloucestershire saw house prices climb by an impressive 11 per cent, making it the best-performing rural area. Harborough in the East Midlands and South Oxfordshire also ranked among the strongest rural performers. Terraced homes in rural regions experienced the most significant growth since 2020, with average prices rising 25 per cent. In contrast, urban flats registered the lowest growth at just 6 per cent amid ongoing concerns about leasehold issues, flammable cladding, and an oversupply in some locations.

Nationwide’s analysis found that prices in predominantly rural areas rebounded during 2024 after easing slightly in previous years as Covid-era demand pressures dissipated. Rural properties enjoyed a 3.4 per cent rise in value in 2024 compared to a 1.8 per cent increase in urban areas. Interestingly, areas classified by the Office for National Statistics as “urban with significant rural elements,” such as parts of Kent and the Home Counties, reported even higher growth at 3.6 per cent.

While the desire for private space underpinned much of the demand during the pandemic, Nationwide’s senior economist Andrew Harvey notes that rural areas are still maintaining an advantage post-pandemic. Detailing the resilience of the country housing market, he said that less urbanised areas have held their edge in terms of price growth, with this trend likely to persist in the coming years.

Looking ahead, Nationwide predicts house prices will grow between 2 and 4 per cent in 2025. Meanwhile, a separate study by Lloyds Bank highlights a contrasting trend in some high-end coastal locations. Homes in Sandbanks, Dorset, Britain’s most expensive coastal area last year, saw average values decline by 3 per cent, equating to a £33,595 drop, largely attributed to recent tax changes.

While rural house price growth shows no signs of slowing, the divergence between countryside and urban property markets highlights how shifting lifestyle priorities have reshaped Britain’s housing landscape since the pandemic.