There's always been a close connection between the quality of schools and the local housing market. Top-tier schools have long acted as a magnet, attracting families eager to provide the best education for their children and elevating house prices within catchment areas. Given that one of the Labour Party’s headline policies is to introduce VAT on private school fees, the desire to live within the catchment area of an outstanding state school is rising.
This year, 44% of homes in the same postcode sector as an outstanding secondary school sold after a bidding war – which we define as having received offers from three or more buyers. Although this is lower than the share of homes sold close to an outstanding school after bidding wars last year (47%), it is still far higher than before the pandemic – in 2018, it was 27% and in 2019, 33%.
On the other hand, homes close to schools rated less highly have seen interest from buyers fade more quickly. Just 28% of buyers purchasing a home close to a school classed as inadequate faced competition from three or more buyers.
Nevertheless, despite the slowing market and affordability pressures, our analysis also shows that homes situated near top-rated schools have defied wider price falls this year.
For our research, we looked at the 521 state secondary schools in England – 15% of the total – that are currently ranked as outstanding by the education inspector Ofsted. So far this year the average price of a detached home located near an outstanding secondary school has risen 3.6% year-on-year, outpacing the rest of the market. Meanwhile, for detached homes near an inadequately rated school, prices have fallen by 1.2% annually.
On a national level, Land Registry data shows that larger homes have borne the brunt of price falls thus far. However, the opposite is the case for detached houses close to outstanding secondary schools, which are still seeing rising prices.
This year houses close to these schools cost an average of £540,350, 8.1% more than the wider local authority average. By contrast, the average price of a house in the wider local authority averaged £499,790. More than one in ten (12%) detached homes close to an outstanding secondary school now cost an average of at least £1m – this is the highest share ever and up from only 3% a decade ago.
However, the premium for homes close to outstanding secondaries is much higher for houses than it is for flats (the premium for flats is only 0.8%). The average flat located near an outstanding secondary school cost 0.8% more than one in the wider local authority.
Even though mortgaged buyers’ spending power has been curtailed over the last 18 months, increasing focus on the election polls over the year ahead might unlock more moves of this kind. But with the average house near an outstanding school commanding such a large premium over the wider local authority, for some households this move might mean having to compromise on the home they’re buying.
