New analysis by estate agents Yopa reveals that living near ‘outstanding’ schools in England can significantly increase property costs. The research shows that homes near top-rated schools are priced at an average of £359,000, compared to just £243,000 for properties close to schools rated ‘inadequate.’ This difference amounts to a £116,000 premium for those looking to live near the best educational institutions.

Impact of Labour’s VAT plan on property prices
With Labour proposing to remove VAT tax relief on private schools, more parents may consider sending their children to state schools, potentially driving up demand—and prices—in areas near the best-rated schools. Verona Frankish, CEO of Yopa, notes, “Labour’s move to scrap VAT tax relief on private schools will make attending more expensive, which could persuade more parents to put their children into highly rated state schools.”

Premiums vary widely by region
Yopa’s research also highlights regional disparities in the impact of school ratings on property prices. For instance, in Devon’s TQ8 postcode, homes near Salcombe Church of England Primary School, rated ‘good,’ command a staggering 151.5% premium over the local average. Similarly, in Northumberland’s NE20 area, living near five ‘good’ schools and one ‘outstanding’ school costs 121.7% more than the broader area. However, this trend isn’t uniform across the country.

Exceptions to the rule: Affordable homes near top schools
Interestingly, not all areas follow this pattern. In Sheffield’s S4 postcode, for example, homes near St Catherine’s Catholic Primary School, which is rated ‘outstanding,’ are priced 57.6% lower than the local average. Conversely, in East Sussex’s TN3 postcode, where St Michael’s Primary School ‘requires improvement,’ property prices are 121.1% higher than the surrounding area.

Reflecting on these findings, Frankish adds, “Currently there’s a gap of £116,000 between the best and the worst schools, however some will see that as a worthwhile investment to give their children the advantage of a better education… as always, it pays to do your research, as despite the general trend it isn’t always expensive to live near the UK’s best schools.”

As the debate over private school funding continues, UK landlords and property investors should be aware of how educational ratings can influence housing market trends, with potential implications for future property values.