House prices inflated by schools

16 September 2004
Research shows the performance of primary schools affects house prices in the surrounding area.

Nationwide has found that the quality of a local primary school has a knock-on effect on property purchase, with a one per cent higher pass rate equalling a property price premium of 0.25 per cent.

Nationwide's group economist, Alex Bannister, commented: "Since catchments are relatively small and most parents want to limit the time that their children spend travelling to school, it would seem logical if properties that are close to a 'good' school command a premium."

Using the primary school performance tables Nationwide calculated that property prices increase as the average pass rate increases.

In the outer south-east, an identical property in an identical neighbourhood will command a property price premium of four per cent (or £7,220) if the nearest school has a ten per cent higher pass rate.

It would appear from the research that the influence of school performance across regions does not follow a north-south divide.

Although the highest premium paid is in the outer south-east, with £707 for a one per cent higher pass rate, the Midlands and Yorkshire and Humberside are not far behind with premiums of £677 and £624, respectively.

In percentage terms, the biggest impact of school performance is in Yorkshire and Humberside where a one per cent change increases the property price by 0.48 per cent.
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