Premium paid to live near good schools falls

Despite high demand for property in good school catchment areas, the amount buyers are willing to pay for the privilege is declining, says the Royal Institution of Chartered Surveyors.

When RICS last conducted research into the impact high quality schools have on house prices in August 2003, buyers were willing to pay a 12% premium but this has fallen to 8%.

The premium for primary schools is lower than for secondary schools.

RICS says the substantial rise in house prices has led to affordability difficulties in the areas close to good schools, which in turn is putting a lid on prices.

A spokesman for RICS says: “A secondary school with a good reputation can cause mayhem in the local property market. Buyers with children of school age will do and pay anything to get their children a place. However, our latest figures suggest some people are being priced out of the market in these key locations.

“It is normal for potential buyers to check local Ofsted reports before they read the particulars for their preferred properties. The education effect on property prices can extend well beyond the school-run boundaries.”

But Melanie Bien, associate director at Savills Private Finance, says the decline in people prepared to pay a premium is positive, as it will bring more realistic pricing to these areas, and fewer people will be priced out.

She says: “If you happen to be buying a family home in a good school catchment area, it is usually the case that you pay an inflated price, which can be a major deterrent.

“But many parents struggle to find the money to buy in that area anyway because education is so vital and school performance is so mixed. However, at 8%, the premium is still high and buying in a good school catchment area is clearly a sound investment.”