Homes near top English state schools cost 13% more on average

New research from Lloyds Bank released on Friday indicates that average property prices in the postal districts of the top 30 state schools in England have now reached GBP344,446, an average GBP40,728, or 13%, higher than county averages of GBP303,738.

Lloyds Bank figures reveal that properties near the best performing state schools were valued at 9.2 times average gross annual earnings, which is reportedly significantly higher than the average across England of 7.7 times average gross annual earnings. Top schools are defined as those secondary schools that achieved the best GCSE results in 2014.

The banking company’s research found that the postal districts of a fifth of top state schools command a housing premium of over GBP125,000, when compared to surrounding areas. Parents of pupils who attend Beaconsfield High School in Beaconsfield pay the the largest premium for their homes, with properties selling at an average GBP636,132, which is 186% above the average house price of GBP342,166 in neighbouring locations.

House prices in the postal district of The Henrietta Barnett School in Barnet were the second highest, trading at a premium of GBP418,860, followed by St. Olave’s and St. Saviour’s Grammar School in Orpington with an average premium of GBP180,447, then the Tiffin schools in Kingston upon Thames at GBP137,665.

However, the research showed that not all top rated schools are located in expensive areas. Of England’s top 30 state schools, 16 are in locations with an average property price below the average in neighbouring areas. Homes in the postal district of Aylesbury High School trade at a discount of GBP122,506, compared to the county average of GBP342,166. The next largest house price discounts in cash terms, are in Reading, Berkshire, where Reading School and Kendrick School are located, at GBP119,485. The Reading schools are followed by Queen Elizabeth’s School in Barnet, at GBP95,681 and Westcliff High School for Boys Academy in Essex at GBP58,970. 

Andrew Mason, mortgages director at Lloyds Bank mortgages director, commented:”In general, homes close to the nation’s top performing state schools command a significant premium over neighbouring areas. The presence of a top performing state school appears to help support property values in many of these locations as parents compete with other buyers to land the property that gives their child the best possible chance to attend their chosen school.”

UK house prices rise three times the rate of wage inflation

House prices in the UK have continued to stretch further away from the reach of millions of workers, a new study confirmed today.

Research from the National Housing Federation shows that house prices have risen three times as much as average incomes over the last ten years.

In 2001 the average price of a home stood at GBP121,769 and the average salary was GBP16,557. A decade later the price of a home had shot up 94% to GBP236,518, while wages rose just 29% to GBP21,330. The result is that buying a home has become increasingly unaffordable for many people.

To make matters worse, saving for a mortgage has become harder as the amount of deposit needed to get a mortgage has risen by 386%. In 2001 the deposit for a typical 90% mortgage was GBP12,177, corresponding to about nine months’ salary. By 2011, after the financial crisis, banks were generally less willing to lend 90% of the price and the the deposit needed for a typical 75% mortgage had ballooned to GBP59,129, almost three years’ salary.

At the same time the cost of renting has increased, a letting group said today. LSL Property Services plc, which owns a letting agent network that includes national chains Your Move and Reeds Rains, reported that the average rent paid by private tenants in England and Wales had reached a new record high of GBP725 a month in July.

Average rents rose by 1% compared to June and were 2.9% higher than a year ago, fuelled by strong demand for rented accommodation due to the growing number of people unable to get a mortgage.

Housing charity Shelter has called for government action to increase house building in order to address the housing crisis, after official figures released yesterday revealed a 24% decrease in the number of new homes started. Only 21,540 new homes were started by builders in the three months to June 2012, down 24% from the same period a year ago and a 10% decrease from the first three months of the year.

Shelter’s chief executive Campbell Robb said: “With a flatlining construction sector, building significant numbers of new, genuinely affordable homes would create jobs and stimulate the economy. More importantly, it would send a clear message to the millions of people priced out of homeownership or struggling with high housing costs that the government is on their side.”

Britain’s young people to struggle to get on the property ladder

The UK’s dwindling stocks of affordable housing has often been called a crisis. But in the report Housing options and solutions for young people in 2020 the Joseph Rowntree Foundation (JRF) says things will only get worse without drastic action.

While the bond traders and investment bankers of tomorrow are likely not to feature among the predictions made in this report, the less well remunerated in society will be be increasingly unlikely to secure a decent place to live. And this will have deeper democratic implications: socially essential, but poorly paid, jobs will attract fewer people.

The report makes grim reading for anyone not earning a large salary.  Grimmer, too, if you are young and not earning big bucks.

It rams home the stark fact that young people are going to suffer. From those in education to those leaving it, the future for a generation is bleak.

Bad enough knowing they will be job hunting during the worst depression since the 1930s. But this report is unflinching in describing the grim realities of the housing market in eight years time.

Buying a house will be even harder. The Council of Mortgage Lenders say the average age of first time buyers was 31 in 2009.

On current projections the National Housing Federation says if an average 21-year-old today saves regularly, does not have other financial support and has no children, they will be 43 when they are able to afford to buy their own home.

By 2020 demand will have risen on all forms of housing – home ownership, private renting and social housing. As a result almost 5 million people aged between 18 and 30 will be living with their parents.

People with low-paid jobs, young families, disabilities, and the so-called ‘chaotic young’ who have spent time homeless and in and out of social housing – all will be marginalised.

By JRF estimates, an extra 6,000 people aged 18 to 24 will fall into the ‘chaotic’ category in 2020, unable to find stable housing.

Supply and demand

Why the youth of Britain face waiting as long as 22 years to buy a home is simple. There will not be enough houses for everyone.

Demand will beat supply and prices will rise.

This report underlines the need to increase the supply of housing. But it also shows that schemes to help first time buyers is only a short term answer.

Without more houses, it makes little difference how easier you make buying for some. The end result is that it will only serve to inflate the property prices still further.

Not increasing housing supply by 2020, the report warns, will only increase pressure on the private renting sector and social housing – with both these sector needing to increase supply.

There are many positives in renting for young people, not least the flexibility of short term leases. But the report identifies a clear need to increase supply and improve the quality of rented accommodation by driving investment into the sector. The report advocates using the tax system to provide incentives to individuals and institutions to invest in homes to rent.

A result of reduced investment in the social housing, the report says, means that housing stock is also likely to have decreased by 2020. A distressing possibility identified by the authors is the likely increase in the number of young people deliberately becoming homeless to secure social housing.

Not resolving the shortage in housing will mean young people will be increasingly marginalised in the housing market. This in turn will impact the opportunities they can pursue.

Roles integral to society but with poor pay packets will become less and less attractive.  This will have an impact on many professions.  And from the Bureau’s own rather myopic perspective this is of concern to journalism.

The home of the media

We hold journalism to be fundamental to democracy.  But as old media crumbles, journalist’s pay packets are looking less and less attractive.  Fewer will be able to afford to enter this profession – particularly those who do not come from well-off homes.

And without a wide social panoply of journalists holding the powerful to account, corruption and incompetence will flourish and the public will be disenfranchised.

The lure of working in the well-paid worlds of public relations and press offices is already too strong for many in the profession.

Unless the housing crisis is averted this trend will only increase.

Written by Jack Serle of TBIJ.