Moving to an area with a highly regarded school is often seen as a catalyst for change in demand for the housing market. With the average price of a home near many primary schools raising to outstanding levels in England, parents may face steep competition moving into a neighborhood with a school that is in demand.
A primary school that's rated outstanding often sees housing price increases of up to 16% versus homes in an area with a good rating. Based off of home values in areas with schools rated inadequate, we often see a 30% bump. Using the national average of home prices across the UK this represents around £61,000 in price difference when comparing a home in a neighborhood with a school that's rated inadequate versus a home in a neighborhood that has an outstanding rating for their school.
Competition when applying for schools is also quite fierce. In the London area one in seven primary school applications were rejected and most families were unable to get their first choice of school. Around 4.3% of children are unable to get their choice at one of the top three schools.
There is a buyer's premium in London for living close to some of their best rated schools. Buyers are paying an average of £670,000 to live within 500 m of the best rated primary schools in London. This represents a gap of around £85,000 more when compared to living near a school requiring improvement.
In the Northeast, housing prices are substantially lower in getting close to a school with a consistently high rating is much cheaper. In the Northeast house prices within 500 m of an outstanding school may cost just £156,000 on average. Families living close to a poor performing school will regularly see an average price on their homes of £132,000. It seems that there is even a divide in the Northeast with a premium of roughly 9% of a difference between schools.
If you are on the move so that you can get your kids into a better school, it's important to be prepared for the home prices that you may face. Looking beyond the capital for great schooling can be a fantastic way that you can save money on the price of your home and potentially get into an area where your home would be a better investment.
Paying a premium to be within a short distance of a primary school in London is vastly more expensive than trying in other parts of the country. There's also no advantage to locating nearby some of the most prestigious elementary schools as many parents will face a risk even with the application process and getting their children into the schools. One thing is for sure, if you are located close to an elementary school with an outstanding rating, you are sure to see the value and demand of your home increase dramatically.
The housing market for 2019 in the UK is going to experience a major shift in the wake of Brexit. There are many homeowners that are closely tracking the economic status of the UK and there is much uncertainty about Britain's fate with regard to the property market.
The earliest effects
There was a fallout expected in UK property values dating all the way back to 2016. London experienced a price stall and an overall lack of confidence for investment and the housing market has continued to be a little bit sluggish since this time. Some of the worst projections with the immediate departure of the UK showcases around a 30% fall.
Theresa May has ruled out the chance of the second referendum so it is likely that we may experience an even greater drop in transactions. Since 2018 there has been a 20% drop in property transactions throughout the Southeast and London. Housing prices in Scotland and the East of England have seen a boost however with 4.8 and 3.3% increases.
The demand for housing
Housing in the South East is predicted to continue falling but the UK property market should stabilize by the end of the year and rise by a cumulative total of 3%. Home buyers that have been looking for the right property can finally see a bit of stabilization and welcome the chance of investing in UK real estate.
This does however represent a shortfall for many new building projects. Existing housing will continue to push up but with incoming inflation and the rise of interest rates it's likely that we won't see any massive gains in housing prices or many people willing to build brand-new homes.
Mortgages in the UK
The bank of England's interest rate is set to rise in 2019 and prices between one or 1.25% by the end of the year are quite possible. The mortgage market has remained highly competitive through the past few years and it's not likely to change anytime soon. Home buyers need to consider their current borrowing position and complete some ongoing mortgage comparisons to ensure they can get the best rates.
It's important to speak with a broker before you approach the housing market in 2019, especially with the fluctuations of the market has been experiencing. Brexit has played a major role in developing uncertainty within the housing market throughout the UK but we should see ourselves sitting in a more stabilized buyers market versus the markets of rapid growth that we have been experiencing.
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