It has emerged that parents in the UK may face a house price premium of nearly £34,000 to live close to the country’s top state schools.
The study held by Lloyds TSB has indicated that prices in the postal districts of the top 30 state secondary schools in England by GCSE results were 12 per cent higher than in neighbouring districts of the same counties. Ironically, The house price premium of £33,631 is nearly three times the average annual private school fee of £11,422.
Six of the top 30 state schools commanded an even higher premium of more than £100,000. Homes near Henrietta Barnett School in Hampstead Garden Suburb were the least affordable, with an average price tag of £827,496 – equivalent to 19 times average earnings for the area and showing that premiums will be paid.
Suren Thiru, housing economist at Lloyds TSB, said: ”The presence of a good school appears to help support property values in many of these locations as parents compete with other buyers and investors to land the property that gives their child the best possible chance to attend their chosen school. The downside of high property values in many of these areas is that it can create a financial barrier to attending the best non-fee paying schools, with many lower and middle income families finding it very difficult to purchase a home in these locations.”
Obtaining the best mortgage rate could assist parents in affording their home. For instance some lenders Standard Variable Rate mortgages are nearly as high as 6%. With rates as low as 2.5% on new mortgages this could represent a saving of £3,500 per annum in interest only payments on £100,000.
With a trickle down effect, those near good schools with large multiples of average earnings in the area are likely to encounter difficulty in obtaining suitable mortgages and put their children in the right school for them.
