Regardless of whether you have children or not, if you are looking to purchase a property, it is best to choose a home that is near a well-rated school. Why? Because school ratings affect demand and have an impact on property prices.
According to a study published in the Financial Times, an increase in a school’s Ofsted rating inadvertently boosts property prices in the area. The data revealed that homes located in well-heeled areas received an immediate increase in their value when a local primary school was awarded a higher Ofsted rating.
The Ofsted rating is used by parents across the country to determine school performance and assess whether they would want to send their children to that particular school. The rating is given more weight by parents than any other school performance measures such as exam results. Schools with an “Outstanding” rating are in high demand among parents, which in turn increases the demand for property within an easily commutable distance. As demand increases, so does the value of the homes in the catchment area as buyers are prepared to pay more to live there. In certain circumstances, buyers have been known to offer between 5% and 10% over market value for the right home within the right catchment area.
The findings of the study, which looked at the ratings of 8,000 primary schools in England, found that prices of properties located in affluent areas where a school’s rating had been improved by one notch, rose by as much as 1.5% on average. The impact on home values in less-affluent or disadvantaged areas was not as apparent, with prices in those neighbourhoods only increasing by approximately 0.5% on average. This could be a result of other factors in those areas negatively affecting demand in those areas.
While an improvement in the Ofsted rating had a positive impact on housing prices, the opposite held true when a school was downgraded with home prices taking a knock in those areas by the same margins.
With Ofsted having such a bearing on the property prices in an area, property search portals have introduced a ‘school checker’ feature which shows a school’s most recent rating, the catchment area and the distance from the property.
At the end of the day, it is clear that people are willing to pay more for a home if it means they have given their children the opportunity at a better-quality education.
A great real estate agent will be able to provide insight on the schools in the neighbourhoods where you’re looking to buy. Find one to work with here.