Page last updated at 11:40 GMT, Monday, 23 November 2009

House prices 'raised by good primary schools'

Sale signs
House price trends are different in various parts of the UK

Homes near the best performing primary schools in England can cost £19,500 more than identical properties elsewhere, research has found.

A 10% increase in the local primary's Sats pass rate can add an average of £5,860 to the value of nearby homes, Nationwide Building Society said.

The biggest premium was seen in Yorkshire and Humberside.

However, a loft conversion or extra bedroom would still add far more value to the typical home, the lender said.

Regional split

Primary school catchment areas tend to be relatively small and are based on the proximity of an applicant's home to the school.

IMPROVED RESULTS IMPACT ON HOUSE PRICES
North of England: 4.5% rise (£5,190)
Yorkshire and Humberside: 4.6% (£6,124)
North West England: 3.3% (£4,507)
East Midlands: 2.9% (£3,893)
West Midlands: 3.6% (£5,173)
East Anglia: 3.3% (£5,320)
Outer South East England: 3.1% (£5,835)
Outer Metropolitan: 3.4% (£7,821)
London: 3% (£8,031)
South West England: 2.6% (£4,557)
England: 3.3% (£5,860)
Source: Nationwide. Impact of a 10% increase in Sats pass rate

"One might expect that families would prefer to live near high performing schools and be willing to pay a premium for this," said Martin Gahbauer, Nationwide's chief economist.

Some 70% of primary schools in England see their pupils achieve their Key Stage 2 Sats at level four or above. Just 2.4% of primaries have a 100% attainment rate at this level, and this is reflected in the house prices seen in the local areas, according to the Nationwide report.

A house located near one of these highest performing schools could cost 11% (£19,500) more than an identical property near a school in the bottom 25% of Sats results.

The building society also calculated that a 10% improvement in the proportion of 11-year-olds achieving a level four pass in their Maths, English and Science Key Stage 2 exams would have a significant impact on house prices in the neighbouring properties.

In England, such a rise in performance would add 3.3% - or £5,860 - to the value of a typical home. This was higher than the 2.5% premium recorded when Nationwide carried out a similar study in 2004.

On a regional level, the range was topped by a 4.6% (£6,124) premium in Yorkshire and Humberside, followed by 4.5% (£5,190) in the north of England and 3.6% (£5,173) in the West Midlands.

At the other end of the scale, the rising performance level would add a 2.6% (£4,557) premium to the typical property in the south-west of England.

Home improvements

The battle for school places has come under sharp scrutiny in recent months. A recent report by the Schools Adjudicator, Ian Craig, said an estimated 3,500 parents lied on school application forms each year.

While [a primary school] is something that parents are likely to consider when buying a home, it is just one of a number of factors that impact house prices
Martin Gahbauer, Nationwide

He called for tougher action against the thousands of parents who lied to get their children into popular schools.

However, improvements to a home would still have a deeper effect on its value than the success of nearby schools, the Nationwide research found.

While adding a second bathroom would only lift a typical home's value by 1.3%, increasing the floor space by a 10th would put 4.8% on the price. An extra bedroom would lift it by 11.4% and a loft conversion would raise a property's value by a fifth.

"On balance, the extent to which primary school performance affects property prices will depend upon the range of schools in the area and while it is something that parents are likely to consider when buying a home, it is just one of a number of factors that impact house prices," Mr Gahbauer said.

House price graph



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