Buying a home near a school comes with its benefits, and the close proximity can help families secure a place for their youngsters.
But living within the catchment area of a poorly performing school could actually be detrimental when it comes to selling your home – knocking as much as £14,000 off its value.
Falling in value
If your home is located near a low performing primary or secondary school, it can reduce its value by up to five figures, according to new research by PwC.
Living close to a badly rated secondary school is the worst for lowering your house’s selling price, with homes losing around £14,000 of their value.
By comparison those near a poorly performing primary school aren’t hit quite as hard, although they are still estimated to be worth £9,000 less than the local average house price.
However, owning a home close to a good school can add £25,000 to the house’s value, if it is a secondary school – while homes close to primary schools can see their property value increase by £27,000.
Yorkshire and the Humber was found to have the UK’s highest primary school premium, with homes near good primary schools priced at 12 per cent more than the local average.
For secondary schools, the West Midlands had the biggest price increase, with buyers expected to pay up to £47,000 more for a house near a good school.
The five per cent house price premium near schools in London is also costly, adding an extra £32,000 due to the capital’s higher house prices.
Ratings awarded by the Office for Standards in Education (Ofsted) are one of the main influences on the price of homes close to schools, according to the research.
Schools across the UK are regularly inspected by Ofsted, who award a rating which ranges from ‘outstanding’ to ‘inadequate’.
As well as this rating, the school catchment areas (the area a child must live in to be permitted to attend a particular school) also plays a part in influence the value of homes.
Properties which sit in the catchment area of schools with good ratings are more highly sought after, as it can enable parents to get their children into their desired school.
Penalties and premiums
Homes nearly badly rated schools are much less desirable for families with children and as such can be harder to sell.
This increased or decreased demand influences local house prices, creating the so-called school ‘penalty’ or ‘premium’.
House price premiums near highly rated schools can also make it harder for low-income families to live in the area.
Jamie Durham, lead author of the research, said, “High house prices around good schools have the potential to lock out poorer families from the best performing schools and, while the amount varies across England, it remains a significant obstacle to social mobility across regions.
“Concerningly, this can also be compounded over time – children from wealthier families who can afford more expensive homes may do better in school as they can afford additional support, contributing to higher attainment in these schools, and reinforcing the house price premium.