Do incomers pay more for rural housing?

The paper explores whether incomers pay a price premium for rural housing and, if so, whether it varies according to the origin of the buyer. Empirical analysis focuses on Aberdeenshire, Scotland, distinguishing between housing in the accessible and remote rural locations within the region. Buyers originating from Aberdeen city are found to pay more than locals in accessible rural housing markets, with the price premium highest in the high quality housing market segment. There is however, no evidence that a price premium is paid by in-migrants from more distant locations. In contrast, consistent with information asymmetry and higher search costs, buyers from the rest of the UK are found to pay significantly more for high quality properties in the remote rural area. From a methodological perspective the findings support the use of multi-level models which allow for unobserved neighbourhood effects.