To live near the best schools, be prepared to pay a £77,000 premium
That's the average amount parents are forking out to buy a house in the right catchment area to ensure their children get a good education. Chiara Cavaglieri reports
Sunday 28 August 2011
The UK property market is still firmly in the emergency ward, with sales continuing to slump and prices falling over most of the country.
But as schoolchildren get ready for another term, research suggests there could be one way to buck the trend in tough times – buying in the catchment areas for good schools.
"When asked what three things are most important when it comes to the value of a property people talk about 'location, location, location'," says Henry Pryor, a housing expert and commentator. "And proximity to a station or good road or being in the catchment area for a recognised school is always a positive."
Parents all over the country are having to play the system and move into specific areas to get their children into good schools. This is the top priority for more than a third of prospective homebuyers with children aged 10 or under, according to a survey by Santander Mortgages.
Although the study showed that many parents are willing to pay a premium of more than £12,000 to secure the right home – and school – for their offspring, research from property search engine PrimeLocation.com suggests the real figure could be much higher. Parents potentially pay an incredible £77,000 more to buy in elite state school catchment areas – not far off the cost of sending a child to some private schools.
"For many years now the challenges of the catchment area-based lottery for state schools have vexed millions of parents across the UK," says Nigel Lewis, a property analyst at PrimeLocation.com. "Our research highlights how much it can cost to get your child into the ideal school."
The average cost of a house near one of Britain's top 50 state schools is £298,378 – 35 per cent above the UK average asking price of £221,110. At the top of the league, homeowners are paying an average of £655,429 for the privilege of being close enough to the Henrietta Barnett School in Hampstead, north London.
Average asking prices also exceed twice the national average in catchment areas for St Olave's and St Saviour's Grammar in Orpington, Kent – the second best state school in the UK – and 10th-placed Queen Elizabeth's School in Barnet, north London. One exception, however, is Bishop Wordsworth's Grammar School in Salisbury, the highest ranked state school in the UK, which has lower average asking prices of £286,112.
"In some parts of the country the premium could be more than the £77,000. For example, in parts of Camden where I have a client looking to spend up to £1m, one side of the road can be as much as £100,00 more valuable because it is in the prescribed area for a good school," says Mr Pryor.
As well as carrying an automatic premium, homes within these boundaries should be easier to sell because homeowners have an obvious market to pitch their property to.
Times are undoubtedly tough for homeowners planning to sell in the current market, with the number of homes sold in the UK falling from 89,000 in July last year to only 79,000 last month, according to HMRC. As the market was heading towards its peak in July 2006, the market saw 148,000 transactions.
For buyers planning to invest in property now, even those without children who can afford to pay over the odds may well decide that a property near a good school is more likely to hold its value and will be easier to shift in difficult times later down the line.
Estate agents have been quick to realise the pulling power of a top state school. Mr Pryor points out one such agent, Finders Keepers in Oxford, which offers a service showing which school catchment area any given house qualifies for, along with links to the latest Ofsted reports and exam results.
Buying a home can never be as simple as looking at a single aspect, however, so there are some warnings. Nearby school sports grounds could mean you have to put up with noise and lights at night time and your street parking could be affected with heavy traffic during the dreaded school drop-off and pick-up hours.
"There are other factors to consider such as accessibility, amenities and noise – which are all important considerations to anyone," says Nicholas Leeming, the business development director of Zoopla.co.uk.
Whether your home is appealing to buyers is dependent upon so many things that it would be dangerous to focus solely on proximity to particular schools. Even with all the right boxes ticked in terms of location you must still have the right type of property. If you are banking on family demand, you need a family-sized house.
"School catchment areas really affect only one sector of the market: the family buyer. There is a wide range of other buyer types including first-time buyers and people downsizing who aren't influenced by such things," says Mr Leeming.
There is also a chance that local authorities could change the application system. Anyone relying on the present catchment area system to keep their investment ticking over could come unstuck if parents no longer need to focus their attentions on particular streets to get the desired school.
Some local authorities are already considering making changes to the application process. For example, Brighton and Hove council has partially abandoned the catchment area system so that places at oversubscribed secondary schools are randomly allocated as a tie-breaker.
In the meantime, however, experts say there are no clear policy changes in the offing and schools should continue to be firmly in mind for any househunter – albeit with a close eye on all of the other factors that affect a localised property market.
"With markets getting tougher, any neighbourhood advantages are becoming much more obvious," says Mr Lewis. "SW2 and SW12 have very different markets even though they are a 10-minute walk apart, simply because one is perceived as a more affluent area and has better schools."
Nigel Lewis, Primelocation.com
"The property market can be brutal. Although it can be illiquid and slow, it is one of the most transparent supply and demand markets. You need to have a unique selling point to your property. In reality, this means that all local areas have their allures – it can be geography, landscape or underpricing, and the school league tables are certainly part of this picture."
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