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The Ofsted effect: Average property prices increase by up to 33% in areas with ‘outstanding’ schools

The Ofsted effect: Average property prices increase by up to 33% in areas with ‘outstanding’ schools

Research from comparethemarket.com reveals the premium that people pay to live in areas with schools rated ‘outstanding’ by Ofsted.

Published: 01/06/2020
  • Those in Warrington, Cheshire can expect to pay the biggest premium to live near top-rated schools, with house prices rising by a third (33%) compared to the average house price
  • Houses in areas with ‘outstanding’ rated schools are most affordable in Sunderland, Blackburn and Oldham

The new research reveals that people in Warrington, Cheshire, pay the biggest premium to live near top-rated schools, with house prices rising by a third (33%) compared to the average house price. On average, a house in Warrington costs £243,000, however this rises to £322,321 in areas with ‘outstanding’ schools.

The most expensive postcode to live is Western Central London, including areas such as Soho, Fitzrovia and Charing Cross, where the average house price is a whopping £1.2 million. Residents in this area can expect to pay over a quarter of a million pounds (£266,667), or 22%, extra to live near schools rated ‘outstanding’ by Ofsted, where the average house price is £1,466,667.

Rank Postal town Postcode area Average house price Average in Ofsted 'outstanding' areas Price difference (£) Price difference (%)
1 Warrington WA £243,000 £322,321 £79,321 32.64%
2 Western Central London WC £1,200,000 £1,466,667 £266,667 22.22%
3 Swindon SN £287,000 £345,412 £58,412 20.35%
4 Sheffield S £175,000 £208,319 £33,319 19.04%
5 Cambridge CB £399,000 £473,714 £74,714 18.73%
6 Colchester CO £281,000 £327,000 £46,000 16.37%
7 York YO £235,000 £273,364 £38,364 16.32%
8 Southampton SO £350,000 £406,268 £56,268 16.08%
9 Durham DH £142,000 £164,000 £22,000 15.49%
10 Gloucester GL £301,000 £347,125 £46,125 15.32%

Despite the price hikes most wanting to live near ‘outstanding’ schools face, the research also reveals that there are a small number of areas where access to the best quality of education does not come with a property premium. The most affordable area to live near ‘outstanding’ rated schools is Sunderland, where the average house price in Ofsted ‘outstanding’ areas is just £117,747, 4% cheaper than the average house price in the area. Other more affordable areas with the best schooling options include Blackburn, Oldham, Cleveland and Wigan.

Postal town Postcode area Average house price Average in Ofsted ‘outstanding' areas Price difference (£) Price difference (%)
Sunderland SR £123,000 £117,747 -£5,253 -4.27%
Blackburn BB £137,000 £135,230 -£1,770 -1.29%
Oldham OL £149,000 £136,867 -£12,133 -8.14%
Cleveland TS £148,000 £148,413 £413 0.28%
Wigan WN £149,000 £151,150 £2,150 1.44%

In a number of towns, houses in the catchment areas of ‘outstanding’ schools were cheaper than the area’s average. In Wolverhampton, for example, house prices in ‘outstanding’ school areas are, on average, £153,111; 21% cheaper than the average of £194,000 in the region.

Postal town Postcode area Average house price Average in Ofsted 'outstanding' areas Price difference (£) Price difference (%)
East Central London EC £919,000 £632,333 -£286,667 -31.19%
Wolverhampton WV £194,000 £153,111 -£40,889 -21.08%
Bath BA £324,000 £276,133 -£47,867 -14.77%
Walsall WS £210,000 £191,333 -£18,667 -8.89%
Oldham OL £149,000 £136,867 -£12,133 -8.14%

Mark Gordon, Director of Money at comparethemarket.com, said:

“Living within the catchment area of schools rated as ‘outstanding’ by Ofsted is a top priority for parents wishing to give their children access to the best quality of education. The cost of living in these high-demand areas can be a big concern for families, who often face a trade-off between house price and quality of education. However, our latest research reveals that it is possible to still reap the educational benefits without the price tag.

“The quality of children’s education is not something that parents should have to compromise on, and the dream isn't necessarily out of reach. By getting the right mortgage advice, using the right tools and following the right steps, it may be closer than you think. Our mortgage eligibility calculator helps families to see how much they may be eligible for.”

Notes to editors

Methodology

Using Land Registry data we found the average house price in each postcode sector (that’s a postcode to four digits, such as SW1A 0) that contained a school which was rated as outstanding by Ofsted in its most recent inspection.
Please note that we took the 3,715 schools listed as Outstanding on Ofsted’s website as of 28/02/2020, so some schools may be missing. In addition, if there was more than one school registered on the same premises (for example a nursery and primary school) we treated this as one school.
We then compared this to the average house price in the postal area (a postcode to two digits, such as SW).

Research: https://www.comparethemarket.com/mortgages/content/the-ofsted-effect/.

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