Town or Country? Which Offers the Best Long-Term Investment?

For a long time, buying property has been considered a reliable long-term investment, offering protection against inflation, excellent returns and the opportunity to diversify your portfolio.

Given the recent UK economic problems, this investment strategy is more appealing than ever before, offering better returns and lower risks than saving or investing in the stock market.

When we compare the average UK property price with the FTSE All-Share Index, we can see that property tends to provide better overall returns than shares over periods of 10, 20 and 30 years.

Timeframe toNovember 2022Average PropertyPriceFTSE All-SharePrice ReturnsFTSE All-ShareTotal Returns
30 years454.21%215.28%786.53%
20 years134.53%106.68%318.74%
10 years74.67%35.05%92.84%

Source: Willis Owen Financial Institution 

However, buying a property is much more than just an investment. It can also be a place to live with your family, rent for additional cash flow or simply enjoy while your capital grows.

If you’re looking to move to Somerset or Wiltshire, invest in property in the area or already live in one of the counties but fancy a change of location, then you might be considering whether to move to one of the county’s bustling towns or cities or a calmer, rural setting nestled in the tranquil countryside.

Which is more likely to produce excellent ROI? Which would be better suited to your personal preferences of needs?

In this article, our team at Cobb Farr will compare the potential benefits of purchasing a property in the countryside versus in the town or city to help you make this tricky decision.

Why moving to a town or city can be a good investment

Somerset and Wiltshire have a plethora of vibrant towns and cities to choose from. Attractive towns and cities like Bath, Bradford on Avon, Taunton, Weston-Super-Mare, Salisbury, Swindon, or Trowbridge have always been attractive to potential property investors.

They typically increase in value over time because of the scarcity of land, population growth and constant demand for housing. For example, a detached house in Bath increased in value from £114,813 in 1995 to around £800,000 today- a growth of nearly 600%.

As you know, places like Bath are a magnet for tourists due to its historical significance, superb cultural and entertainment offering, and beautiful architecture. There is no surprise that property in and around the city commands a high price but despite this, there is no shortage of demand.

The larger towns and cities in Somerset and Wiltshire tend to offer better amenities than smaller towns or villages in the countryside, more employment opportunities, better schools, and a wider range of cultural and entertainment options. This thriving environment can feel more attractive to first-time buyers and those with young families who want to benefit from the opportunities these towns and cities offer. Having said that, property in towns and cities does tend to be more expensive, making it harder for first-time buyers to get onto the property ladder.

Why buying to let in town or country can be a good investment

The rental market is booming in our area at the moment. Both in town and country we are seeing a lot of activity, with rents going up and properties, especially in the £300 to £400K bracket, achieving some of the best yields.

If you’re buying to rent in the town, you’re more likely to find a tenant and make a decent rental income because there is a diverse range of potential tenants including students, professionals, young families and individuals.

The buy-to-let market in the country is slightly slower but we have seen interest in properties with holiday let potential. There are certainly good opportunities in the country for this market, with some people looking for properties that give them the dual-purpose option of using a holiday home for themselves part of the time and then renting out to tourists at peak times of the year.

Due to the rising interest rates, we are seeing a degree of caution currently with some people turning to the rental market rather than buying, waiting for a change in the rates before they make their move.

We have also seen activity with some people who have decided to rent out their property rather than sell.

On the whole, both town and country are performing well for buy-to-let investors. Research undertaken in 2020 revealed that towns and cities generally achieve the best rental yield, seeing an average return of 5% compared to 3.72% achieved in rural market towns.

Why moving to the country can be a good investment

Despite the apparent advantages of moving to a town or city, moving to the country or a rural area can also be an excellent long-term strategy. With serene and peaceful surroundings away from the chaos and activity of the city, you can enjoy a better quality of life and reduce your stress levels.

Places like Frome, Norton St Philip, Holt, Corsham, Beckington, Castle Combe. Lacock, we could go on, are great places to live and offer the escape from city life that you may be looking for

This is one of the primary reasons why we’ve seen more people than ever before wanting to move to a rural location in search of a better work-life balance, more space, and beautiful surroundings.

We see many people looking to move from London or from places further afield like Hong Kong and Singapore to enjoy this quality of life. Ex-pats reaching retirement gravitate towards places like Bath and the surrounding area to enjoy everything it offers. Of course, everything is relative. Compared to sprawling metropolitan centres like London and HK, cities and towns like Bath and Bradford on Avon are still considered the ‘countryside’. it’s only we locals who know the subtle differences!

On the whole, rural properties tend to be more affordable than urban properties, although don’t always provide the same rental income as towns because of a lower overall demand. Naturally, there are some very large country estates and properties in the country that command a high price but the average property in the countryside does tend to be a bit cheaper than the larger towns and cities.

Regional market performance can vary significantly, and certain rural areas can experience more growth due to popularity, tourism, or infrastructure development. Additionally, amenities, schools and employment opportunities do tend to be lower in the countryside than in an urban area and those who enjoy an active social life may be disappointed.

From a capital growth perspective, countryside locations that are close to towns and cities tend to perform better than more rural properties, although this does depend on market factors and whether you are investing in a home or buying to rent.

Leigh Road, Bradford-on-Avon, Wiltshire

Town or country – which should you choose?

As you’ve seen above, urban, and rural properties each offer unique advantages.

Invest in a town or city property and you’ll likely gain a stronger capital appreciation, higher potential for rental income and greater amenities. Country properties, on the other hand, tend to offer better value for money, the potential for portfolio diversification and growth opportunities.

This means that it can be hard to choose which is right for you. However, if you invest in property in Bath, Bradford-on-Avon, Wiltshire or Somerset, you can enjoy the best of both worlds.

Compared to living in metropolitan areas, they offer the natural beauty, relaxation and calm of country living but in an urban setting. They’re also easily commutable, offer fantastic amenities and culture, property prices continue to soar, and demand is high, even in the more rural outskirts.

While you should consider your personal preferences (especially if you are planning to live in your property), it’s also worth exploring market dynamics, assessing the potential value of your investment, and weighing up the benefits that moving to each of these locations offers.

Want to find out more about property investments in Bath, Bradford on Avon, Wiltshire, or Somerset?

Contact us today. We can help you find the ideal property for your requirements, whether you’re focused on return on investment, buying to rent, or simply relocating for a better quality of life.

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