If I had a penny for the times I have been asked this question….well here goes.
A recent survey of over 400 schools, indicated that families are putting education, in particular state school education, as a priority when buying a home. With many moving just a few miles away to enter the catchment area for their desired school. Studies show that an estimated 60% of families move to secure a quality education for their young. Proof in the pudding folks as we watched a 3 bedroom detached property in Walsall let within hours and it let over the asking price. Yes, you guessed it, the family wanted the primary school!
The top 30 schools effect local house prices by an average of 10% of the properties worth. The results of the aforementioned survey, can only really examine the inflation in price in suburban areas, as the cost of city homes are subject to so many variables, it becomes hard to attribute changes to one factor. In turn the lowest performing 25% of schools are seeing a 19% drop in house prices, perhaps only further proof that well placed property is a ‘recession proof’ investment.
So as in investor in UK property, how can you make this news work for you? Although it could be argued that the data suggests only sale prices for homes are being effected, a rental opportunity can be an ideal alternative and an ideal investment. The thing to remember when viewing properties, is the proximity to the best schools in the county. If a property is within reasonable walking distance of a state school that has been rated ‘good’ or ‘outstanding’ by Ofsted, then the value of the house should maintain. By offering a cheaper rental alternative, then you are catering for a proportion of parents that cannot afford to buy a house closer to the catchment area, but make the education of their young a priority.
It has been proven that parents are willing to pay three times the amount it would cost to send their child to private education, to move closer to a good state school. A staggering nine times the income of a British household. Which means that buyers are adding almost a third onto the average house price, if it is close to a good state school.
If you are investing in property close to a good school, then it is worth remembering that the flip side of your investment being valued against a neighbouring educational institute, is that development or change to this school could also cause your investment to change in value. Choose areas where there is a small possibility that large and unwanted low market developments will be built, altering the market and the school intake demand. It should be fairly easy to judge as large development is always less likely to occur in the more upmarket areas. Walsall’s biggest benefit is that it is relatively ring fenced by way of new developments and more on the way; see the following blog posts:
The added bonus of this kind of property investment is that, if you no longer require lettings income and wish to make a cash return, demand for this kind of property means it never sits on the market for extended periods of time. With a little TLC, it’s wholly possible that a healthy return can be made quickly from this kind of ‘win-win’ investment.
If you would like to discuss the contents of this article or any other property related matter please do not hesitate to contact me direct on the following:
Phone: 0345 257 9850