The link between schools and house prices is now an established fact – no longer just fodder for dinner party speculation. Thanks to a series of studies carried out by research organisations and the Department for Education (DfE), we now know in absolute terms that the best-performing state schools will push up property prices in affluent areas where there is competition for places.
While top-performing primary schools don’t always come up on our clients’ search criteria, I often recommend those looking to purchase a buy-to-let or investment property to consider an area blessed with a clutch of well-regarded schools. Such is the competition to secure a place at these schools that parents have been known to take any steps – including a temporary period of renting near their preferred school while the application is submitted. The tiny catchment areas of Honeywell and Belleville primary schools located in the ever popular “Between the Commons” streets in Battersea are always a safe bet as void periods in rentals are likely to be short-lived. But caution is advised, you may be paying a premium of between 10% and 15% to be on the “right” street (or in some instances the correct side of the street!) to fall within the catchment areas of the best primary schools.
Percentages vary, depending on both the studies and the area of the country, but research published at the beginning of this year found that in London, you pay an average premium of 13% for a house located near a primary school rated Outstanding by OFSTED, its highest-performing category. Bousfield Primary School, located at the top of The Boltons in the Royal Borough of Kensington and Chelsea has a tiny catchment area, and is probably the most expensive example of this phenomenon in the country. As you can see from the case study below, the premium paid to live within the catchment area of this popular school is huge.
Case study: Bousfield Primary School
Streets analysed: within catchment – The Little Boltons, Bolton Gardens, Bramham Gardens; outside catchment – Cathcart Road, Roland Gardens, Cranley Gardens
The average price for a family property – by which we mean a three (or more) bedroom flat or house of 1,200 to 3,500 sq ft in size – which fall within the school’s catchment area is £3.86m, compared to £2.84m outside the catchment area. On a price per square foot basis you are looking at £2,027 per sq ft within the catchment and £1,699 per sq ft outside. That means there’s a staggering 26% hike in asking prices and a 16% increase in prices paid per square foot for properties within this coveted area.
Figures taken from Lonres based upon sales from January 2014 to June 2017.
Meanwhile, figures published by the DfE state that buying a house near one of the top 10% of primary schools in London would add £38,800 onto the average price tag; the figure for across England was an increase of £18,600.
Earlsfield Primary School in south-west London has just been rated Outstanding by OFSTED – I expect competition for houses within its catchment area to increase as a result. But it’s worth remembering that a good OFSTED rating is not a permanent feature of the school and may be reduced following subsequent inspections. While houses within catchment zones in affluent parts of the country nationwide have been found to jump in value 1.5% in the aftermath of an improved score for the local primary school, a worsening score has been found to deflate house prices by the same amount. The study also revealed that houses located near schools in less affluent areas, measured by the number of free school meals, were unlikely to be improved by a good OFSTED rating. It is also possible for schools to change their admissions procedures: Fox Primary School in Notting Hill – another fiercely-fought catchment zone – has just moved to a lottery-based place allocation system because demand for places is so high.
The interesting paradox is whether it’s cheaper to go down the state education route by buying a house near a good school than it is to go private. If you’re paying a premium in real terms of £200,000 or more to buy a house near a top-performing school, in a roundabout way, you’re paying almost the equivalent of private school fees.
Most expensive Outstanding primary school catchment zones