The 2016 Halifax Rural Areas Quality of Life Survey shows that South Oxfordshire residents rate themselves happy, and content with a high level of life satisfaction and not a great deal of anxiety.
The second most desirable place to live was Chiltern, Buckinghamshire. Last year's winner, Rutland, came third in the annual survey.
Areas where living standards are highest are tracked by ranking local performance across a number of key indicators.
See also: Best places to live revealed by survey
These indicators cover the labour market, the housing market, the environment, education, health, and personal well-being.
The survey is based on data at local authority district (LAD) level and examines all 121 rural LADs in Great Britain.
Data is also gathered from a number of sources, including: Halifax, Point Topic (Broadband data), ONS, DEFRA, the Met Office, the Department for Transport.
Other sources are the Department of Children, Schools and Families, the Department of Energy and Climate Change, the Welsh Assembly, and the Scottish Executive.
The local authority district (LAD) of South Oxfordshire rose up the rankings to claim the title for best rural quality of life, having only just made the top 10 last year (10th place).
Residents scored well in a number of the categories analysed, with health also being a significant factor: 97% of those living in the area report themselves to be in good health.
Meanwhile, female life expectancy is also high, at an average age of 84.7 years, a full three years longer than males (81.7 years).
Four out of every five residents (81%) are classified as being employed, and those in a full time occupation typically enjoy high incomes, with weekly average earnings of £863.
To top it all, the cost of living in South Oxfordshire is not much higher than many other areas.
Average house prices in South Oxfordshire are 6.9 times the average annual pre-tax local income – only marginally higher than for the rest of the country (6.8).
Inhabitants of the Chiltern LAD also tend to score well, with a high average female life expectancy of 86.7 years, and 97% reporting themselves to be in good health.
The employment rate is similar to South Oxfordshire at 80%, and those in full time occupation typically enjoy high incomes with weekly average earnings of £912.
This was the highest in the survey and 46% above the average for all rural areas.
School performance is also strong with 75% of 15+ year olds achieving five or more GCSE results at grades A-C.
Last year's winner, Rutland, is Britain's third most desirable rural place to live.
Residents of the East Midlands LAD tend to be in good health, have a high employment rate and benefit from a low crime rate.
Rutland residents also enjoy a relatively good climate with less rainfall and more sunshine than the national average.
There were several big climbers in the top 20, with West Dorset rising 47 places to 17th spot, East Hampshire up 35 places to 16th and East Dorset moving from 47 in 2015 to 20th in 2016.
Halifax mortgages director Craig McKinlay said:"Many of the towns in the top 20 are either within commuting distance to the capital or another major city.
"With South Oxfordshire particularly, the residents can enjoy the financial benefits of working in London and still have the rural lifestyle.
"Importantly having an exceptional quality of life does not necessarily come with added costs, as house prices relative to earnings in the area are not much different from the average."
Over all, southern England and the East Midlands offered the best rural quality of life.
The top 50 rural places to live in Britain are again dominated by the south east with 16 districts found in this region, followed by east of England, which claims 12 of the top 50 spots.
The south west had 10 places in the top 50, and East Midlands had seven.
Areas from outside the south in the top 50 besides Rutland include Hambleton in North Yorkshire (18th) and Wychavon in the West Midlands (24th).
Others included Monmouthshire (35th), the Orkney Islands (46th) and the Ribble Valley in the North West (49th).
Southern areas tend to receive higher ratings for weekly earnings, the weather, health, and life expectancy.
Northern areas scored well on education in terms of grades and smaller class sizes, lower house prices in relation to earnings, lower traffic flows and lower population densities.
Full results from the survey can be viewed here.
