The good schools effect

If you have school-age children, you probably know something of the pressure involved in trying to ensure they receive the best education you can give them.

For most parents, local schools are a key factor in their decisions about where to live; some move home specifically to be in the catchment area of a good state school, or near a well-regarded independent school.

The business of access to decent schools is both daunting and stressful – and it's made all the more so by the fact that access to high-quality schools generally comes with a significant house price premium attached.

As estate agent Savills reveals in its latest Good Schools research, carried out in autumn 2009, property prices around secondary schools occupying the top 25 per cent of the national GCSE performance tables are on average 16 per cent above the average price for their county. Indeed, the gap has widened since 2007, when Savills first investigated the Good Schools premium; then, it was just 13 per cent.

Evidently, the pulling power of good schools helped to cushion local property prices from the worst of the housing market slump. Prices in the areas around schools in the top-performing quartile fell less than 16 per cent from the market's peak in October 2007 to its trough in March 2009, while homes in the vicinity of the bottom 25 per cent of schools dropped by almost 20 per cent.

"These are not massive differences, but they're significant – we're talking about a 20 per cent difference in the size of the price fall between houses near the most successful schools and those near the worst performers," points out Lucian Cook, head of research at Savills. Furthermore, he adds, it made very little difference to the size of the price fall whether the best schools were comprehensives, grammar schools or independents.

In fact it's likely that a good state school becomes all the more attractive when economic times are hard. In Savills' Amersham office, for example, Nick Pounce notes: "In the recession, with fewer families able to afford private education, good quality state schools have been more sought-after than ever before."

So, in the event that you do have some freedom in the location of your new, education-driven family home, where does it make sense to look? "Unless money really is no object, many parents like to have a good state school as a first choice for their kids, with decent local independent schools as a fall-back if they don't get in," explains Cook.

A comment from William Peppitt of Savills' Cranbrook office in Kent hits the nail on the head. He covers the catchment area for Cranbrook grammar school: "The academic success and sporting facilities are those of a public school. The only difference is that if you live within 10kms of the school gate, entrance is free. As a result, two thirds of our buyers are looking for catchment properties."

Lucian Cook took a close look at educational choice and quality in towns all over England, with the aim of identifying a shortlist of 'Educational Super Towns', or ESTs.

It was a fiddly business. Each secondary school in a town earned points according to how it had performed academically in the national GCSE performance tables. To qualify as a potential EST, a town had to have at least five secondary schools; moreover, these had to include at least one state school in the top 25 per cent nationally. Qualifying towns could then be ranked by average school score to produce a 'top ten' of ESTs.

Cook then compared average house prices in each of the top ten ESTs with the average for the county. Overall, he found a 13 per cent price premium over the county average, with some ESTs scoring considerably higher.

Smart, prosperous, popular places such as Harrogate, Tunbridge Wells, Bath and Winchester all make the grade, with a choice of excellent state and independent schools. And it's no great shock to find that property in all those towns commands a substantial premium relative to the county average: almost 50 per cent in both Winchester and Harrogate, 25 per cent in Bath and 20 per cent in Tunbridge Wells.

Not all the ESTs have property prices out of kilter with the county average, however. Lincoln and Sleaford, which come eighth and ninth in the list, are pretty well in line with average prices for Lincolnshire as a whole - though Cook points out that that may be a reflection of the fact that the grammar school system operates through the whole county, reducing the pressure on parents to fight for catchment area homes.

Moreover, three of the top ten – Bishops Stortford, Fareham and Woking – have housing markets cheaper than their county averages (as much as 17 per cent in the case of Fareham). Prices, in the latter two at least, may be kept down by the counterbalance of a relatively modern housing stock, suggests Lucian Cook.

What about the names that do not figure? The need for at least one high-performing state school ruled out a number of towns that might otherwise have featured in the list. Truro and Ascot, for example, were both precluded because of this.

Similarly, some towns with high educational standards, among them Harpenden, Telford and Romsey, didn't make it because they do not have as many as five schools of any description.

Cheltenham and Oxford are also notable by their absence, but this time because they show signs of the variable educational quality found in larger cities. "Both have great educational facilities, which definitely pull people in and support the housing market – but they're patchy; some areas in both towns are much less well served, and they bring the overall average down," explains Cook.

So if you're faced with the prospect of relocation driven by school requirements, be realistic: the chances are that you'll be paying a property supplement for the privilege of access to a good school. On the other hand, your home is likely to hold its value for the same reason. And if you're searching for better educational value for money, the less obvious 'anomaly towns' with high-performing schools but less glamorous housing stock could be good places to start.