Want to beat the property market? Buy near a top school

Outstanding secondaries can help protect homes nearby from price vagaries. Chiara Cavaglieri reports

Children are gearing up for a new term and at the school gates, some parents will be sending off their loved ones knowing they paid a premium to buy their home in the perfect spot. School catchment areas aren't always an obvious factor when buying a new home, but for investors and parents alike, they could offer some security against the ups and downs of the property market.

Living within the catchment area of a good primary or state secondary school is often a top priority for parents and they are willing to pay a hefty premium for the privilege. According to new research from Zoopla.co.uk properties near the top 100 state secondary schools are worth 25 per cent more than the average for the wider region. And in the South-east of England, Zoopla says being near a top state school can command a premium of more than double the local average.

"Whether during a recession or not, the competition for an address within the catchment area of a popular state school creates lively demand among desperate parents," says Nigel Lewis of Zoopla.

State schools are currently a lottery for UK parents – the decision as to which one you can send your children can come down to which side of the road you live on. This has led to heavy criticism that the poorest families are lumbered with the worst schools, being unable to pay their way into sought-after catchment areas.

For those who can afford the premium, however, it means starting the property search on the Ofsted website, locating the top-notch schools. Local councils also provide information on which schools are rated "outstanding" by Ofsted and which streets lie within their catchment areas. Estate agents will also help by showing prospective buyers which houses qualify for a given school.

Despite the cost premium, many parents who can't afford or don't want to send their children to a private school see the extra initial cost as a price worth paying.

"With private school fees rising, the value of such properties is insulated against the market's harsher turns because living in the catchment area of a good school can save a family a fortune over the years," says buying agent Gabby Adler, who specialises in finding family homes.

There are other benefits too, as these properties tend to hold their value in difficult times and can be easier to sell when the market stalls, simply because there will always be parents willing to go the extra mile. This scramble for homes pushes prices up and creates something of a micro-market. These properties often come with an attractive lifestyle too, located in thriving communities, which makes them popular with all buyers.

Ms Adler points to the London borough of Richmond, home to some of the best primary schools in the south of England, where catchment areas for schools rated "outstanding" by Ofsted are very small and may be less than a dozen streets.

"This scarcity of supply ensures asking prices remain high," she says. "In Little Chelsea, for example, the catchment area for Barnes Primary, two to three bedroom cottages with small gardens that could have been bought for £450,000 to £550,000 in 2006 are now selling for between £750,000 and £850,000."

Harry Gladwin of the estate agent Knight Frank says schools are a huge pull for many people looking to buy in Oxford too, drawn by exemplary primaries in the Cotswolds and villages such as Kingham and Bledington. Although stock levels are generally low in the area, Mr Gladwin says that the added pressure from family buyers looking to secure a home around these state schools has led to intense competition for "best in class" houses.

"Village houses in the best locations, priced between £1m and £1.5m are in such high demand at present, that we are increasingly conducting off-market sales, matching properties to buyers who are willing to pay a premium," he says.

But, relying solely on the present system is a risk for both investors and for parents as the rug could be pulled from under their feet by admission rule changes or staff turnover at the schools. It is important to recognise that the local council can change catchment boundaries and that simply with a change of headteacher, a school with a high Ofsted rating may not always perform so well. Falling standards at a school, to the point it loses that all-important Ofsted rating, could affect prices in the local property market.

"School catchment areas are not constant and do change. If you buy a property on the edge of the catchment area this carries risks as you could be in the catchment area when you buy the property, but when the time comes for applying to your school of choice, you may no longer be," says James Grillo at Chesterton Humberts country department.

Even without these risks, parking and heavy traffic during the school runs could also put you and other buyers off so do keep in mind all the usual factors including accessibility, amenities and noise. Transport links are always important and you should find out as much about the local area as possible (websites such as UpMyStreet.com and Homecheck.co.uk may help), visiting it at different times of day to get a feel for noise, traffic noise and safety.

Don't make the mistake of snapping up property in a catchment area without a getting a thorough survey done. At the very least you can use any problems highlighted to negotiate on the price, but a survey will also uncover any potential structural issues, drainage and flood risk.

"Buying in a catchment area shouldn't be No 1 on your list when deciding where to live," says Mr Grillo. "The position of the property, how suitable it is for your requirements and how appealing it is to you, should all come first."