Many first-time buyers cannot afford property in rural areas in England
English villages will become "exclusive enclaves of the elderly and wealthy" unless more affordable housing is built, an independent review has said.
Planning restrictions should be eased to encourage rural businesses, and bland housing estates discouraged, the government-commissioned report found.
Expensive homes and low wages threaten rural communities, says the report author, Lib Dem MP Matthew Taylor.
Ministers, countryside campaigners and developers have welcomed the report.
Housing minister Caroline Flint said that the government would take further measures to boost rural enterprise and affordable housing in the countryside.
But ministers have ruled out a recommendation to restrict the availability of second homes in England's national parks, saying there are "more innovative ways of providing the affordable housing rural communities need".
The English countryside is a wonderful place to live and work - if you can afford a home and if you can find a reasonably paid job
The government will give its full response to the report later in the year.
The review - Living Working Countryside - found house prices in England have been driven up by an influx of people moving from cities.
The effect has been to price young local families out of their own communities.
Meanwhile, what Mr Taylor describes as "endless bland housing estates" lacking shops, parks and other facilities have been crammed on to the edge of towns.
He said: "The English countryside is a wonderful place to live and work - if you can afford a home, if you can find a reasonably paid job.
But for too many people country life is challenging and urgent action is vital to stop villages dying and our market towns being wrecked by unsympathetic development. "
Mr Taylor's report found that England's rural population had grown by 800,000 people in the last decade. This marked an 7% increase in the number of people in the countryside - twice the rate of growth in urban areas.
Liberal Democrat MP, Matthew Taylor carried out the report on rural life
The disparity between low average incomes and high house prices in rural areas was also addressed in the review.
The average local wage of people living in rural areas is £20,895, some £4,655 lower than the average in urban areas.
This was coupled with the fact that the average house price was £8,000 more in rural areas than in conurbations.
It is so refreshing to read a report which puts long term planning, local distinctiveness, and community consent at the heart of its recommendations
In rural parts of England only 17% of purchases were made by first-time buyers, compared with 33% in urban parts of the country.
In order to stimulate employment and local economies in the countryside, the review recommends easing planning rules to encourage small rural businesses to move into urban centres once they start to grow.
It also says small businesses should be encouraged in the countryside through the adoption of flexible planning policies - particularly where people work-based extensions to homes are concerned.
And it concluded that housing associations should end bans on people setting up a home-based business in social and affordable homes.
Mr Taylor, whose report was commissioned by the prime minister, said many people find life in the countryside "challenging", adding that "urgent action is vital to stop villages dying and our market towns being wrecked by unsympathetic development".
He added: "If we fail to build the affordable homes to enable the people who work in the countryside to live there we risk turning our villages into gated communities of wealthy commuters and the retired."
Mr Taylor said, in many cases, "just a handful of well designed homes, kept affordable in perpetuity for local people, will make all the difference to the sustainability of a village and its services".
The problems are worse in the most rural areas
Unusually, support for Mr Taylor's recommendations has come from both developers and those campaigning to save the countryside.
The Rural Services Network, a membership organisation devoted to improving services in rural communities in England, said it agreed with the "main thrust" of the report, particularly on the issue of helping first-time buyers as it said "young people are the lifeblood of the countryside".
"Generally we welcome the report," said a spokesman.
He went on: "Despite the credit crunch, affordable housing remains one of the most pressing issues affecting the countryside.
"Adequate affordable housing in rural areas is vital - not only for people who live in the countryside, but people who live everywhere.
"A whole host of key rural workers, including police officers, teachers and nurses can't afford to buy their own homes."
The report was also welcomed by the Campaign to Protect Rural England (CPRE).
"It is so refreshing to read a report which puts long-term planning, local distinctiveness, and community consent at the heart of its recommendations," said Tom Oliver, head of rural policy at the CPRE.
He said the CPRE "wholly supports the identification of the planning system as the key to high quality, attractive settlements and surrounding countryside".
The National Housing Federation welcomed the report and called on ministers to implement the recommendations "as quickly as possible."
Federation chief executive David Orr said: "The Taylor review sets out how to revive England's villages as sustainable places in which to live and work and the onus is now on the government to enact its recommendations.
"Matthew Taylor shows how villages can be living, breathing entities, instead of fusty museum pieces that are the preserve of the rich and elderly.
"The report must not be allowed to gather dust on ministerial shelves."
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