Readers might recall a Nethouseprices article from earlier this year, in which we covered the findings of Nationwide research showing that a house situated within one of the UK's national parks costs an average of 22 per cent - or £46,000 in cash terms - more than an otherwise similar property in the same county. (See: https://nethouseprices.com/news/show/2333/house-prices-in-the-uk-national-park-price-premium). Lloyds Bank has now published its annual study on the same topic and, while it confirms that housing in one of these areas typically does attract a price premium, it does differ from the earlier report in several important regards. In this three part feature, we first ask why property in the national parks is such an important, and even emotive,issue - and then set out the headline findings of the Lloyds Bank National Parks Review. In the second and thirds instalments, we will examine each of the parks in greater detail.
Housing in the national parks: why such a hot button subject?
The most obvious reason for our interest in the national parks generally is that they represent the country's most spectacular natural assets. Beautiful, unspoilt and protected by law from over-development and industrial exploitation, they are regarded as being held in trust for the benefit of future generations. Crucially, they are also breathing spaces for residents of our great cities. Think, for instance, of the gorgeous Peak District, which has offered peace and tranquility to the citizens of Manchester, Liverpool and Leeds for centuries. Our attitude towards the national parks is probably best described as being one of protectiveness.
This sentiment, of course, means that we accept that there is a finite amount of new housing development that can be carried out in the parks. At the same time, such are the attractions of such places as the Lake District, Exmoor and the Yorkshire Dales, that many of us would love either to live there permanently or to buy a holiday home for our own use or for letting out to other fans of the area. One of the first principles of economics now comes into play, with demand for property outstripping supply by a considerable margin and inevitably pushing up costs to the point that the national parks boast some of the most expensive house prices in the UK.
The problem with this cycle is two-fold:
1. Local people whose families have lived in the parks for generations are increasingly priced out of the market, because the available housing is unaffordable to those who earn average wages.
2. There is a fear that communities within the parks will lose their identity and effectively evolve into holiday resorts or weekend retreats for the affluent residents of other parts of the country.
There doesn't seem to be a magic policy bullet to ease the tensions around this issue and to provide relief to local residents who want to buy homes in these locations. This being said, researching this piece, we found several examples of local authority initiatives designed to reset the markets. For example, some councils are planning to prohibit the sale of new builds to buyers who haven't lived in the area for at least three years, while others are looking at ways to offer financial help to local people, so they can compete with potential buyers from outside the area. Whether these ideas come to fruition on any significant scale is yet to be seen, but the fact that authorities are considering them demonstrates the strength of feeling that the subject generates.
Certainly, as we will see shortly, the Lloyds review underlines the affordability challenges facing those who wish to buy residential property in some of the national parks.
Lloyds Bank National Parks Review: the findings
Firstly, some points about the methodology used by Lloyds in preparing its study:
- The bank used Office for National Statistics (ONS) and Land Registry sold prices within the National Parks and compared them with average property prices in the wider county. Some National Parks span more than one county, of course, and, in these cases, a weighted average of prices in all the relevant counties was used.
- The study concentrated on the English and Welsh National Parks, but did exclude the Northumberland National Park purely because the volume of home sales in that area was too small to offer a representative sample.
- Lloyds Bank doesn't evaluate the Scottish National Parks for the purposes of this report, but Nethouseprices will try to make amends for this omission by dedicating Part Three of this series to an in-depth review of the Nationwide Building Society research into Scotland.
1) A home in one of the English and Welsh National Parks costs an average of £116,500 more than in the adjacent county. This equates to a 46 per cent premium.
2) Properties in the New Forest, in the South East England, are the most expensive, costing a remarkable £581,488.
3) Snowdonia in Wales is host to the most affordable homes, with the average house in that area costing £180,126.
4) Properties in 11 out of the 12 Parks included in the review were more costly than those in their surrounding counties, with Snowdonia being the exception.
5) Four National Parks - New Forest, South Downs, Lake District and Peak District - carry house price premiums of more than £150,000.
6) The average property price across all of the National Parks is £368,804.
7) The cost of a home in a National Park is typically 11.7 times local average annual earnings. This contrasts sharply with the position in England and Wales at large, where a house costs some eight times local average annual earnings.
We hope you have found this feature interesting. Visit us again soon for the second and third instalments and for all the latest news about house prices in the UK, property investments and housing policy in England, Scotland and Wales. Highlights for the rest of the week are: the Nationwide house price index for November and more discussion of the budget and its impact on housing.
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