Unveiled: Premium Location Costs Additional £81,000 for Parents Seeking Homes Near High-Ranking Schools
Parents Pay Premium Prices for Top School Catchment Areas
In both Australia and the UK, a growing number of parents are willing to pay significant premiums to secure homes within the catchment areas of top public schools.
In Australia
Families in Sydney and Melbourne are paying substantial premiums to live near premium schools. For instance, homes inside the catchment areas of Killara High, Willoughby Girls, and Lindfield Learning Village on Sydney’s North Shore can cost up to $1.3 million more, representing about a 40% premium. In Melbourne, similar homes in top catchments such as Princes Hill and University High School cost around $357,000 more.
However, these premiums do not necessarily guarantee higher long-term capital growth. Homes within catchment zones have often grown at a slower rate over 15 years compared to neighbouring areas. Regional variation exists, with some school zones showing strong growth and premiums, while a few popular schools’ zones may even have lower prices than nearby areas, presenting opportunities.
In the UK
In the UK, about 73% of parents are willing to pay a premium for homes near top schools, up 11% from the previous year. The average premium parents are willing to pay is approximately 15% above the average house price, which translates to around £40,500 more on a £270,000 average home price. Some parents are willing to pay up to 25% more (£67,500) and relocate an average of 31 miles to secure a place in a good catchment area.
Properties within the catchment zones of the top 50 schools are on average priced 42% higher than the UK average, reflecting strong demand. The premium size and growth prospects also vary by location and specific school catchment profiles. Other factors influencing premiums include transport links, local income levels, and school reputation dynamics.
The trend highlights the increasing pressure families face in accessing quality education, often driving significant financial decisions related to housing.
Elsewhere in the UK
In Northern Ireland, the premium is £32,225. In Scotland, a 15% premium is an extra £32,286. In the south east, it's a £58,239 hike to £446,499, while in the east of England it's a £50,174 jump to £384,668. In the west midlands, the premium is £39,040, in the southwest, parents are willing to pay a £45,346 premium, and in the north west, the premium is £36,344. In Wales, it's £34,189, and in the north east, the premium is £26,588. In Yorkshire and the Humber, it's £32,330.
Driving Factors
The VAT hike on private school fees has driven up competition for places in top state schools. Labour's manifesto revealed it would scrap the exemption for private schools from VAT, which previously saw them free of the 20% tax. As a result, almost a quarter of parents (21%) say they plan to pull their children out of private schools. Almost three-quarters of parents are willing to pay more to live in an area where their children would be prioritized for a place at such a school. Over 69% of parents say they would relocate to get their children into the best state school catchments.
This trend underscores the importance of understanding the property market dynamics in different school catchment areas to make informed decisions about housing and education.
- Higher property prices in top school catchment areas are not exclusive to Australia and the UK, as families in other regions, such as Northern Ireland, Scotland, south east, east of England, west midlands, southwest, north west, Wales, north east, and Yorkshire and the Humber, are willing to pay significant premiums to secure homes within these zones.
- In addition to real estate, the premiums for homes in top school catchment areas can also have a significant impact on personal finance, with some parents willing to pay up to 25% more for a property and relocate up to 31 miles to secure a spot within these zones.
- Despite the premium prices, it's important to note that homes within catchment zones have often grown at a slower rate over a 15-year period compared to neighboring areas, showing that the market can vary both in growth and premium size.
- For those considering investing in properties within top school catchment areas, it's essential to understand the specific school catchment profiles, local income levels, and school reputation dynamics, as these factors can influence the premiums.
- The increasing competition for places in top state schools, brought on by factors like the VAT hike on private school fees, has led many parents to prioritize homes in good school catchment areas, emphasizing the importance of efficient education-and-self-development and learning strategies in selecting the right area for both housing and education decisions.
