Orkney is the best place to live in the UK, with cheap houses, low crime, good schools and a population who are among the happiest and healthiest in the country, according to the annual Halifax quality of life survey.

The survey found that all the top five best places to live in the UK were in Scotland or the north of England. Richmondshire in the north of the Yorkshire Dales came second, while the appropriately named Eden district in Cumbria was third.

The south-east of England used to dominate the survey, but with unaffordable housing, heavy traffic and large classroom sizes it has fallen down the tables, with half of the top 50 places now outside the region.

Only two parts of London crept into the top 50 – Westminster, in 15th place, and Richmond upon Thames at 4oth.

The south’s past advantages – which Halifax said were high employment levels, earnings, more sunshine and less rainfall – have been eclipsed by better housing affordability in the north, quieter roads, lower crime and more space, as well as lower average primary school sizes and better educational results.

At 530 miles from London, and a 40 minute ferry ride from John O’Groats in the far north of Scotland, Orkney is one of the remotest settlements in the UK. But the islands have the best employment record in the UK, with 88% of the 16- to 64-year-old population in work, compared with the UK average of 74%.

A total of 97% of residents describe themselves as in good or fairly good health, while the average crime rate is 5.9 per 10,000 of population, compared with the UK average of 44.1. School class sizes are small – with just 18.6 children per class compared with 27.1 nationally, and exam results are excellent. About 75% obtain five or more SCQF at level 4, broadly equivalent to GCSEs. It helps that spending on pupils is the highest in the UK, at £9,662 compared with the £4,633 UK average.

Average house prices in Orkney are £173,349, Halifax said, meaning that local workers can afford a home at 5.2 times local incomes, compared with 7.3 nationally.

James Stockan, leader of Orkney Islands council said: “It’s very pleasing that Orkney has taken the crown for the best quality of life in the UK. It’s down not only to our environment but also to the people who live here, who combine a traditional sense of community with a forward-thinking, self-reliant, ambitious, can-do attitude that makes this a very special place to live and work.

“We’re not without our challenges though – our worst winter days, although wildly dramatic, can prove too much for some, with the old advice being that you have to live through one winter here to know whether Orkney is really for you.”

There was one area of the UK that topped Orkney for happiness levels – the Rushmoor council area in Hampshire. The result may come as a surprise to the residents of Aldershot in Rushmoor, a town abandoned by M&S and whose high street is a graveyard of retail names. But Rushmoor also encompasses Farnborough and other leafy areas of concentrated wealth.

The Halifax survey examined a wide range of factors and revealed other locations with big selling points:

Want a big house? The district of the UK with the largest average home size is not in some rich part of Surrey, but mid Ulster in Northern Ireland.

Like the sunshine? The Isle of Wight has the most sunshine in the UK, at 36.9 hours a week.

Hate wet days? Castle Point in Essex has the lowest UK rainfall at 525mm a year compared with the national average of 870mm.

Want less traffic? Head to the Western Isles of Scotland for the quietest roads.

Need superfast broadband? Greater Manchester is the best location.

Looking for the best start in life? Children in Rutland achieve the best school results.

Searching for a bit of calm? The Northern Irish border may be the most tense element of the Brexit debate, but people who live along the border counties report the lowest anxiety levels in the UK. Adults in Newry, Mourne and Down scored an anxiety rating of 1.9, compared with the UK average of 2.9.

Like plenty of pubs? Then go to Eden in Cumbria, which has three times more pubs per head than the average for the UK.

Fran Hollinrake, Orkney resident. Photograph: Ken Amer/Orkney Photographic

Orkney: ‘I see the northern lights frequently’

Fran Hollinrake, 50, is the custodian of the 12th century St Magnus Cathedral in Orkney

“I moved from Edinburgh 15 years ago and never for a second have I regretted the decision. I came here for the quality of life and it has certainly met my expectations.

“It sounds like a cliche, but there really is a strong sense of community and a sense of pride. I have a better and more fulfilling social life. Maybe 15 or 20 years ago there wasn’t much for young people, but now we have the University of the Highlands and Islands, and job-wise, there are a remarkable number of entrepreneurs.

“Wages are relatively low and costs a bit higher, and you might think how does anyone survive, but you adjust to it. You certainly don’t get next day delivery on Amazon, and the broadband is not great. But the flipside is that we’ve been chosen as one of the earliest places in the UK to get a 5G rollout.

“People ask about the winter but I’ve come to love it. I see the northern lights frequently. The other night the curtains of light were almost dancing in the sky. But the wind does blow all the time. You do have to get used to that.”