The link between property values and access to quality education has long been understood, but recent findings from Savills underscore its importance for landlords in today's market. As families increasingly favour homes within school catchment areas, landlords may find strategic advantages in targeting properties near high-performing schools, particularly in London and the South East.

Investment potential in school catchments

Savills' latest analysis indicates that homes located near high-performing state schools not only retain value but also attract higher tenant demand. The report highlights that 68% of the highest-performing parliamentary constituencies are situated in London and the South East, areas where rental demand is particularly strong. This trend suggests that landlords focusing their investments in these locations may enjoy improved rental pricing power and lower void periods.

The data reveals that properties in the top 10% of school performance command an average price of £695,018, a notable 28% premium over regional averages. In contrast, homes in areas with lower school performance show significant price reductions, indicating that school quality is a crucial factor in property valuation. For example, Richmond Park leads the national rankings with an average home price of £1,016,265, demonstrating the financial benefits of investing in high-performing school districts.

Changing tenant priorities

As the landscape of family rental needs evolves, landlords are noticing a shift in tenant priorities. Rightmove's quarterly rental trends report indicates that three- and four-bedroom homes near well-rated schools are increasingly in demand, often resulting in waiting lists before the September move-in period. Families are now staying in rental properties for an average of 4.2 years, nearly double the figure seen before the pandemic, reflecting a desire for stability amidst changing educational environments.

Lucian Cook, head of residential research at Savills, notes that families are willing to pay a premium for access to quality education, and as private school fees continue to rise, this demand is likely to strengthen. Landlords should be aware of this trend and consider the implications for their portfolios, particularly as younger families increasingly prioritise school catchment areas in their housing decisions.

Navigating the complexities of school performance

While Savills' analysis shows a strong correlation between primary and secondary school performance, landlords should exercise caution. The report points out that there is only a partial correlation between high-performing primary schools and secondary schools, suggesting that landlords seeking long-term investment gains must assess educational outcomes beyond Key Stage 2 results. This is especially pertinent for those planning to hold properties for extended periods, as strong GCSE results can significantly influence future property values and tenant demand.

Emerging opportunities in alternative locations

As affordability constraints push families out of traditional hotspots, landlords may find opportunities in alternative locations offering strong educational performance without the exorbitant price tags seen in London. Areas such as Rushcliffe, Sutton Coldfield, Bournemouth East, and Sheffield Hallam are emerging as attractive alternatives, providing quality schooling and more affordable housing options. This shift may present landlords with the chance to diversify their portfolios and capture demand in less saturated markets.