22nd September 2022: Rural communities are facing a triple blow in the cost-of-living crisis, as higher domestic and transport energy poverty, coupled with lower wages, pushes rural areas into a cost-of-living emergency, according to new report published today. The research was conducted before the inflation increases recently announced.
The report, Rural cost of living, by Kovia Consulting for the Rural Services Network, which represents rural councils and other rural service providers, examined the key differences in cost-of-living between rural and urban locations. It found that rural residents working in rural economies earn much less than urban residents, yet still face significantly higher costs across key aspects of living including heating, transport, house prices, rent, food prices, child-care costs and council tax.
The research found that homes in rural areas tend to be less energy efficient with 60 percent of rural homes having an EPC of D or below. Rural households also face a greater fuel poverty gap. The reduction in fuel bills needed to take rural households out of full poverty is £501, compared to an England average of £223. With many rural properties less energy efficient and off the gas grid, the estimated energy cost is 10 percent higher in rural areas, increasing up to as much as 17 percent in Yorkshire and the Humber. And with soaring energy bills and increased price cap, these prices are set to increase further.
Yet rural households are facing dual energy vulnerability, as domestic energy costs are compounded by higher transport fuel costs, due to greater reliance on a car. The research finds that rural households face an average increase of 50 percent per week on transport compared to urban households, with transport costs eating into a higher proportion of disposable income. This challenge is exacerbated as rural bus routes continue to be cut, with a 27 percent decrease in bus services across England in the 10 years to 2022, making cars more essential.
Despite rural areas facing higher costs, wages are also lower, with the average for rural areas 6 percent lower than those working in urban areas. This increases to 12 percent among employees with the lowest earnings, leaving the most vulnerable families unable to cope with soaring costs.
This disparity is also seen within regions, with the average income of employees working in rural areas consistently lower compared to those living in urban areas of the same region. The greatest disparities are within the South West and East and the South East, with employees working in rural areas in the South West having the lowest average income in England, illustrating the need for levelling-up both between regions and within regions.
Rural populations are also facing a housing crisis. Soaring housing and rental costs, combined with a 224 percent increase in demand for each available property since pre-pandemic levels, has sparked a 115 percent increase in rural homelessness between 2017-2020, almost double the national increase.
Rural house prices are 39 percent higher than in urban areas across England (excluding London), with rural villages and hamlets increasing to 55 percent higher. Prices have increased more recently in rural areas, rising 10 percent between 2020 and 2021, with some rural and coastal areas rising at three times the national rate, such as North Devon and Richmondshire.
Rural renters are also facing similar pricing struggles, with prices jumping by 11 percent since the pandemic, compared to just 2 percent in urban areas. This is particularly affecting rural households on low income who now spend 47 percent of their earnings on rent compared to 43 percent for low-income households in urban areas. There has been a 61 percent drop in the availability of rental accommodation in rural areas since the pandemic.
Graham Biggs, Chief Executive of the Rural Services Network, comments:
“The cost of living is a significant issue for all people and businesses across England, but rural areas have systematically faced higher costs and disadvantages compared to urban counterparts, which is leaving communities more vulnerable.
“While the recent government energy support package is welcome, rural areas are facing a triple burden of higher heating and transport costs, while also earning a lower income. As the report shows, other costs of living are also higher for rural people than their urban counterparts. The government must overcome policy silos and develop an integrated approach that recognises the multiple forms of disadvantage rural areas face. This should include levelling up the rural economy to ensure that low wage levels can be improved, as well as supporting rural houses to become more energy efficient to help get families out of fuel poverty. Many rural homes which are off the gas network are more difficult and costly to heat and insulate.
“Out-dated infrastructure and a legacy of other factors, such as poor transport and broadband connectivity, employment opportunities and housing demand, means that many rural areas are more isolated than maps suggest and are all contributing to a higher overall cost of living. Without taking these measures into account, rural areas are at greater risk of being left yet further behind in the cost-of-living crisis.”
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