House buyers paying average 12% premium to be near a good state secondary school

27th October 2013

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Parents looking to purchase a home close to one of the country’s top 30 performing state schools face paying £295,972 representing an average premium of 12% to other parts of the county, according to new research from Lloyds Bank.

On average, this amounts to an extra £31,490. Nine of the 30 top state schools are in locations that command a house price premium of over £80,000 compared to their surrounding locations. Homes in the postal district of the Henrietta Barnett School in North London have the largest premium with homes trading at a premium of 87% (£402,600) to the average house price in neighbouring areas.

Homes within the postal district of Tiffin Girls’ School and Tiffin (Boys’) School in Kingston-upon-Thames command the second highest premium with house prices in the postal district of KT2 at a premium of 51% (£207,591) to the average for the borough. (See Table 1)

However 12 schools out the 30 are in locations where the average property price is below the average of those in neighbouring areas. With an average price of £94,843, properties in the postal district of King Edward VI Handsworth School in Birmingham (B21) are 42% (or £67,738) below the county average.

In cash terms, the largest discount can be found in the area close to both Kendrick School and Reading School where the average house price in RG1 of £202,721 is £108,033 lower than the county average. (See Table 2).

The postal districts of the top performing secondary state schools in six of the nine English regions command a house price premium compared to their county average. The North West has the largest premium with average house prices in the postal districts of the top ten state schools in the region trading 28% (£43,142) above the average house price in their county. This is followed by Yorkshire and the Humber (premium of 18%) and London (15%). (See Table 3)

In contrast, homes in the East Midlands that are close to the best performing state schools are, on average, 6% lower than in neighbouring locations. Average property prices are also below those of surrounding areas in the South West (-4%) and the South East (-3%).

Those on average earnings would find it difficult to purchase a property close to many of the best state schools.

The average house price of £295,972 in the postal districts of the 30 best performing state schools is almost nine (8.8) times average gross annual earnings (£33,740). This is significantly higher than the average across England of 7.3 times average gross annual earnings. (See Table 4)

Homes within the postal district of the Henrietta Barnett School – the most expensive in this survey – are the least affordable with the typical property price of £863,340 in this part of north London almost twenty-one times (20.6) gross average annual earnings in the area. Houses in the postal district of the Tiffin Girls’ School and the Tiffin School are the second least affordable (13.3).

In contrast, properties in the postal district of King Edward VI Handsworth School in Birmingham – the least expensive in this survey at £94,843 – are the most affordable with a house price to earnings ratio of 3.3.

Nitesh Patel, Housing Economist, Lloyds Bank said: “All parents want to ensure their children have access to the best schools, so it is not surprising that homes in areas close to the top performing state schools typically command a significant premium over neighbouring areas.

“However, with the availability of suitable homes in short supply, high demand has led to average prices in many of these areas being out of reach for many buyers on average earnings.”

Table 1: House prices in postal districts of the highest ranked* secondary state schools in England 2013 – House prices above county/borough average

School County/Borough Average House Price  2013* (£) Average House Price in County 2013* (£) Premium to County 2013 * £ Premium to County 2013 * %
The Henrietta Barnett School Barnet ** 863,340 460,740 402,600 87%
Dr Challoner’s Grammar School Buckinghamshire 450,801 308,980 141,821 46%
Altrincham Grammar School (both for Girls and Boys) Cheshire 301,267 201,877 99,390 49%
The Tiffin Girls’ School and Tiffin School Kingston Upon Thames ** 617,454 409,863 207,591 51%
St Olave’s and St Saviour’s Grammar School Kent 364,673 249,471 115,202 46%
Colyton Grammar School Devon 306,808 213,391 93,417 44%
King Edward VI School Warwickshire 303,525 218,711 84,814 39%
South Wilts Grammar School for Girls Wiltshire 252,317 219,475 32,841 15%
Alcester Grammar School Warwickshire 250,069 218,711 31,358 14%
Newport Girls’ High School Shropshire 207,248 186,005 21,243 11%
Top 30 State Schools average   295,972 264,482 31,490 12%

Sources: Lloyds Bank, Land Registry and Department for Education

*Average premium to the county average for the thirty top performing state secondary schools. Average price for 12 months to June.

**Local authority data has been used for schools located in London.

Table 2: House prices in postal districts of the highest ranked* secondary state schools in England 2013 – House prices below county/borough average

School County/Borough Average House Price  2013* (£) Average House Price in County 2013* (£) Discount to County 2013 * £ Discount to County 2013 * %
King Edward VI Handsworth School County of West Midlands 94,843 162,581 -67,738 -42%
Kendrick School Berkshire 202,721 310,754 -108,033 -35%
Reading School Berkshire 202,721 310,754 -108,033 -35%
The Latymer School Enfield 204,180 300,157 -95,977 -32%
Sir Thomas Rich’s School Gloucester 183,279 230,211 -46,932 -20%
Torquay Boys’ Grammar School Devon 173,698 213,391 -39,693 -19%
Sutton Grammar School Sutton 248,357 280,051 -31,693 -11%
St Michael’s Catholic Grammar School Barnet 414,872 460,740 -45,868 -10%
Wallington High School for Girls Sutton 252,363 280,051 -27,687 -10%
Queen Elizabeth’s School, Barnet Barnet 415,405 460,740 -45,335 -10%
Top 30 State Schools average   295,972 264,482 31,490 12%

Sources: Lloyds Bank, Land Registry and Department for Education

*Average premium to the county average for the thirty top performing state secondary schools. Average price for 12 months to June.

**Local authority data has been used for schools located in London.

Table 3: Top state schools house price premium* by English region, 2013

Region Average House Price  2013* (£) Average House Price in County/Borough 2013* (£) Premium to County 2013 * £ Premium to County 2013 * %
North West 195,308 152,167 43,142 28%
Yorkshire and the Humber 200,245 169,966 30,280 18%
Greater London 414,360 359,699 54,662 15%
North 3 142,143 134,310 7,833 6%
East Anglia 214,396 203,576 10,820 5%
West Midlands 193,359 189,718 3,641 2%
South East 262,061 271,539 -9,478 -3%
South West 217,343 227,211 -9,868 -4%
East Midlands 144,395 154,250 -9,856 -6%

Sources: Lloyds Bank, Land Registry and Department for Education

*Average premium to the county average for the ten top performing state secondary schools in each region.  Average price for 12 months to June.

Table 4: Least affordable postal districts among the highest ranked* secondary state schools in England 2013

School County Average House Price  2013* (£) Average Full Time Earnings House Price/Earnings ratio
The Henrietta Barnett School Barnet   863,340     41,908          20.6
The Tiffin Girls’ School and Tiffin School Kingston upon Thames   617,454     46,301          13.3
Colyton Grammar School Devon   306,808     27,354          11.2
Dr Challoner’s Grammar School Buckinghamshire   450,801     45,381            9.9
St Michael’s Catholic Grammar School Barnet   414,872     41,908            9.9
Queen Elizabeth’s School, Barnet Barnet   415,405     41,908            9.9
King Edward VI School Warwickshire   303,525     33,777            9.0
South Wilts Grammar School for Girls Wiltshire   252,317     31,450            8.0
Altrincham Grammar School ( both for Girls and Boys) Cheshire   301,267     36,777            8.2
Alcester Grammar School Warwickshire   250,069     33,777            7.4
Top 30 State Schools average   295,972 33,740            8.8

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