House prices near to the higher ranked schools in the capital are getting a welcome boost, according to research from London agents Bensham and Reeves.
The price of homes surrounding schools with an Ofsted rating of Good or Outstanding have a higher rate of growth than in wider boroughs.
The London market has held fairly firm over the last year despite the challenging economic landscape, although house prices have cooled by a marginal -0.6% over the last year.
However, Benham and Reeves research shows that, on average, house prices in postcodes next to schools with an Outstanding Ofsted rating have increased by 1.9% annually.
In contrast, the average annual rate of house price growth seen across the wider boroughs in which these schools are located sits at just 0.2%.
At the same time, postcodes home to a school with an Ofsted rating of Good have seen house prices climb by 2.3% over the last year, while the rate of growth across their respective wider boroughs has averaged an increase of just 0.6%.
But it’s not just house price performance where top Ofsted rated schools are helping to stimulate the market.
House prices within postcodes home to schools with an Outstanding command a 1.9% premium versus the average across their wider boroughs. While this may not particularly seem significant, this house price premium has grown considerably since last year when it sat at just 0.1%.
Last year, house prices in postcodes home to a school rated by Ofsted as Good actually came in 1% below the average across their wider boroughs. However, today they now command a marginal premium of 0.7%, a swing of almost 2% in a single year.
Director of Benham and Reeves, Marc von Grundherr, said: “Such is the demand for schooling within London that homes within any catchment area can be sought after, even if those schools don’t hold a gold star from Ofsted.
“However, most parents will understandably be keen to secure a spot within a school with a favourable rating, even more so following this week’s news that so many schools have been closed due to structural issues.
“This can drive an unusually high level of competition within confined pockets of the London market. As a result, house price growth within these postcodes is going against the grain of the wider London market which has remained largely static over the last year and these homes are also commanding a premium when compared to the average price across their wider borough.”
For data tables click here