Best state schools add £77,000 to the value of nearby homes

A top-performing state school can add up to £77,000 to the value of a house within its catchment area, according to new research, with the cost of properties near the 50 best-performing state schools 35 per cent higher than in the rest of the UK.

The most expensive homes are in the catchment area surrounding Henrietta Barnett School in Hampstead Garden Suburb, north London, where homes fetch on average £655,429. The selective state grammar, rated "outstanding" by Ofsted, regularly comes near the top of exam league tables.

Other schools which set property prices rocketing include St Olave's and St Saviour's Grammar School in Orpington, Kent, ranked as the second-best state school in the country. Harriet Harman, now the deputy leader of the Labour Party, sent her son there rather than to a local comprehensive in her Camberwell and Peckham constituency in south-east London. Homes in its catchment area exceed twice the national average price of a home, as do those near Queen Elizabeth's School in Barnet, north London.

The research, by the estate agents Prime Location, showed that the average price of a home near one of the top 50 schools was £298,378 – 35 per cent higher than the average price of £221, 110.

Even if parents wanted to rent a home near one of these schools, the average monthly rent of £944 would be 7.8 per cent higher in the schools' catchment areas than in the rest of the country. A spokesman for the Department for Education said: "We are acutely aware that there are simply too few good school places in England meaning some parents have no choice but to send their children to poor schools."

Former government schools adviser Sir Cyril Taylor said the house prices were leading to "selection by mortgage" to the best schools. He argued only those rich enough to buy houses in the catchment areas could secure places for their children in the schools, and he advocated the national adoption of a lottery system for admissions to counteract this.

However, ministers argued their proposals to allow parents' and teachers' groups to set up their own "free" schools in their neighbourhoods would lead to higher-quality provision. The Government announced yesterday 24 such schools – including six faith schools and three former private schools – would open next month.