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Rankings in the Ofsted system could add £32K to the value of a home in a strong catchment area!
Houses near sink schools, where a new headmaster and increased investment have recently arrived, are a good place to look for uplift.
As a school's Ofsted rating increases, the price of homes in its catchment area rises, resulting in tens of thousands of pounds in benefit.
While it is common knowledge that parents would pay a premium to live near a school with a well-established reputation for high quality, recent research shows that raising educational standards can have a positive effect on property values.
Nearly one in ten London state schools improved from a "good" to a "outstanding" rating from the government education watchdog between 2011 and last year, while nearly a third (30%) improved from a "satisfactory" to a "good" rating.
Hamptons International looked at the prices of homes within 100 meters (nearly 110 yards) of improved schools and found that within five years of an Ofsted improvement, values increased by 5.2 percent over industry averages.
According to the most recent data from Rightmove, the average asking price in London is now £624,953, meaning that homeowners who live near a good school will "earn" an additional £32,497.
Improved schools would have the greatest effect on family homes near primary schools, which have smaller catchment areas than larger secondary schools, so very smart buyers looking for uplift should search for homes near sink schools where a new headteacher and increased investment have recently arrived.
People who live near a school with low Ofsted scores can see their property value plummet. When a school is downgraded, rates drop by 2.4 percent, or almost £15,000, when compared to other nearby properties, according to new study.
“London schools have significantly improved in recent years, and this has had a knock-on impact on house prices in catchment areas around the capital,” said David Fell, Hamptons research analyst and report author.
“While an improved rating takes two to three years to represent in values, the average home near a rising school gains an additional 5% in value over five years relative to the general market.
“In the first two years after a school achieves a higher grade, there is always a rush of sales in the surrounding areas as news of the school's increased reputation spreads. Longer-term, more well-known schools contribute to the long-term sustainability of a neighborhood.
”Rushmore Primary School in Hackney, E5, was upgraded from "satisfactory" to "good" during its most recent inspection in 2012. Candy Foy, sales manager at Atkinson McLeod estate agents, said, "The pocket of Lower Clapton achieves more than you get a little further north." Everyone wants to live near the school. ” A three- to four-bedroom Victorian terrace near Rushmore Primary now costs about £1 million.