MortgagesAug 26 2014

Cost of living near top state school is £21,000

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To live close to one of the top 30 state schools in England will cost homebuyers an average premium of £21,000, with the average house price in the surrounding areas now standing at £268,098, according to data published by Lloyds Banking Group.

Five locations close to the top schools command a housing premium of more than £115,000. The postal districts of the top performing secondary state schools in six of the nine English regions command a house price premium compared to their county average.

The south-east has the largest premium, with average house prices in the postal districts of the top 10 state schools in the region trading 27 per cent (£72,314) above the average house price in their county.

This is followed by East Anglia (premium of 25 per cent) and the north west (24 per cent). In contrast, homes in the East Midlands and the south west that are close to the best performing state schools are, on average, 3 per cent less than in neighbouring locations.

Average property prices are also less than those of surrounding areas in Greater London (minus 1 per cent).

Marc Page, mortgages director of Lloyds Bank, said: “House prices close to the nation’s top performing state schools appear to be commanding a significant premium over properties in surrounding areas.

“There is strong competition for properties in areas where state schools are providing top quality education, often in locations with limited supply, which is supporting prices.

“Although property values can be significantly lower in neighbouring areas, many parents don’t appear to be put off from paying a premium to ensure their child has the best possible chance to attend their chosen school.”

Lloyds’ data come after as Halifax reported the cost of a first-time buyer owning a home in the UK is now on average £110 per month less than renting, or £1,316 per year (14 per cent).

The average monthly mortgage costs associated with owning a three bedroom house for a typical first-time buyer in the UK stood at £677 in June 2014; £110 lower than the average monthly rent paid on the same property type at £787.

Five years ago, the average cost of buying was £37 a month more than the typical rent paid.