Should you pay more for property in a top quality school catchment area?
While the UK education system is often in the press for various reasons, did you know that top quality school catchment areas are impacting the local property market? A recent report has confirmed that the value of properties in these particular areas averages around 20% more than those in the local vicinity, outside of a catchment area, although there are some startling stories about people paying well over the odds for property.
The UK education system is such that a general catchment area is in place for all schools and only those living within a particular area can apply. When you bear in mind that some of these catchment areas can be less than 1 mile from the school it is starting to become an issue in the UK real estate market and many people are waking up to the challenge.
What kind of property price premiums are there around the UK?
On the whole it seems that a 20% increase in the value of property in good quality school catchment areas is the norm although there have been some extreme cases. Indeed some of the better grammar schools have seen property price premiums in their catchment areas of up to 200%. This is absolutely bizarre when you bear in mind the cost of property in the UK but it seems that many people are willing and often able to pay above the odds to ensure that their children have the best education.
Quote from PropertyForum.com : “Does the flotation of Zoopla signal the top of the UK property market?”
Catchment areas have been an element of the UK education system for many years now and in reality what can the authorities do? The simple answer is to improve the general quality of schools across the UK although with austerity now kicking in, education becoming more and more expensive and a growing number of specialist schools, is this feasible in the short-term? It will be interesting to see how the government reacts to this news because those willing to pay 200% over the value of similar local properties outside of a catchment area seem to be taking this to the extreme.
Is there an investment opportunity here?
Over the last 20 years or so we have seen an array of UK schools closed and replaced, amalgamated and consolidated and very often there is significant movement in their location. As a consequence, there may be an investment opportunity for those looking to take a greater risk, with potentially greater rewards, looking at areas where new schools are being built and the standard of education in the area is towards the higher end of the spectrum.
A recent report suggested that one in four university graduates would go on to become millionaires which is perhaps one of the reason why so many parents are willing to invest a significant amount of money in property for access to top quality education. In some ways this is polarising the UK education system and many would suggest that those with funds to invest in expensive properties perhaps have the upper hand?