Back to school: The ‘outstanding’ state school price premium

Previously, a top Ofsted rating could send nearby property prices soaring, but recently, this has reached new heights. As private education becomes increasingly unaffordable, due to the VAT rise – the demand for homes near top-rated state schools has intensified. 

The premium price tag of an “Outstanding” rating  

A recent article in The Times reports that homes close to schools rated “Outstanding” by Ofsted average £359,000, compared to £243,000 for properties near schools rated “Inadequate”. That’s a £116,000 difference for being in the right catchment.  

For sellers, that’s been a big benefit. A great school nearby can mean a significant boost in property value, and sometimes even speed, with homes selling faster purely because of the area advantage.  

A shift in school ratings  

However, this could all be about to change. Sir Martyn Oliver, Ofsted’s chief inspector, announced that from this autumn, the government will scrap single-word ratings like “Outstanding” or “Inadequate”. Instead, schools will receive more detailed “report cards” offering a fuller picture of strengths and weaknesses.  

What will this mean?  

For Buyers:  

• Less pressure to overpay just to get into a catchment area.  
• More informed school choice thanks to detailed reports, rather than relying on a single label.  
• Buying in an area with steadily improving schools can offer strong potential for future property appreciation.

For Sellers:  

• While the headline “Outstanding” boost may dwindle, sellers will still benefit if their local school’s strengths shine through in the new detailed reports. While top state schools with historically good reputations, or a strong exam track record, will still thrive and command an impact on local house prices.
• Less volatility means a steadier, more predictable property market.  
• Homes in areas with consistently good schools will still command strong interest.  

Changing the rating system is only part of the solution. The real win for families, communities and the housing market will come from improving the performance of state schools across the board. The more “good” and “great” schools there are, the less desperate the rush to live near just a handful of high-performers.  

Thinking of moving your children to a new school? Contact our teams today to find out more about our areas, or speak to one of our experts about making the move.