Living close to a failing state school could knock more than £20,000 off your house price, new analysis has shown.
Property values have slumped in areas where schools have been downgraded by Ofsted, a report by Hamptons estate agents said. In postcodes where state schools had lost one grade, for instance falling from a “good” to “requires improvement” rating, price growth was 2pc lower than the local authority average.
The average cost to owners of a house was £8,492 over three years, Hamptons said.
A two grade reduction took 5pc off prices nearby – a loss of £20,171 on average.
With house prices expected to plunge by as much as 12pc this year, this could spell trouble for areas affected by the mass downgrading of hundreds of outstanding schools.
Ofsted downgraded 80pc of outstanding schools it revisited in 2021 after beginning an inspection of the top-rate schools for the first time in a decade, according to a report it published last November.
Legislation had previously allowed outstanding schools to be exempt from further inspection, but the new scrutiny resulted in 17pc of outstanding schools re-graded as “requires improvement” and 4pc as “inadequate”.
The worst affected area since 2019 was near Millbay Academy in Plymouth, which was downgraded from “good” to “inadequate”. The price of a house took a 34pc hit relative to the local authority area, dropping by 11pc between 2019 and 2022.
The Trinity Catholic School in Nottingham was downgraded from “outstanding” to “good” in 2019. Property prices were 24pc behind the local authority area. Prices grew just 1pc between 2019 and 2022.
Hagley Catholic High School in Worcestershire was another “outstanding” school which was then rated as “good”. Prices for houses nearby had 22pc lower growth than the local authority average.
High performing state schools are expected to deliver a boost for local homeowners. A one grade improvement in 2019 resulted in a 1pc uplift to the price of a house compared with the local authority average, worth £4,731.
A two-grade rise led to a 6pc improvement, benefiting homeowners by £22,088 on average.
Jonathan Hopper, of buying agents Garrington Property Finders, said family buyers should pay close attention to Ofsted ratings when deciding where to move.
He said: “There is fierce competition to be in certain catchment postcodes for the best performing state schools. That has been the case for a while but I think it's a trend that is about to become amplified even further with Labour's threats of adding VAT on to school fees.”
If Labour comes to power, private school fees are expected to become more expensive, which would force some families to opt for state schools, he said.