Introducing the Effect of Schools and Education on Property Prices

Ryan Rahnavard
September 26, 2019

Why You Should Invest in Property near Education Establishments

When you invest in property, you want to invest in a location that will offer both income and capital growth potential. In other words, a location that is likely to attract tenants and homebuyers, now and in the future. Competition from prospective tenants puts upward pressure on rents. Competition from would-be homebuyers pushes house values higher.

In my last couple of articles, I examined the first of the property fundamentals that support income and capital growth potential – shops and leisure. Over the next few articles, you’ll learn about the other critical property fundamentals. I start here with the first of two articles discussing schools and education.

In this article, you’ll learn why the existence of education facilities matter to investors in property.

People Want to Live in Communities

Generally, humans are friendly people. They enjoy the company of others. They gain comfort from feeling a part of something bigger. Ask any rugby player or Sunday league footballer why they play the sport, and most will put time with their mates at the top of their list. After work, many people visit a local pub for a ‘swift one’ with their colleagues. What does any of this have to do with schools and education, I hear you ask?

People are communal creatures, and the presence of schools and other education facilities helps to build communities. They also help the local economy to grow.

Young Families Are the Lifeblood of a Vibrant Community

There is nothing more important to parents than their children’s futures. And parents will go to extraordinary lengths to secure a good beginning for their children. Top of many parents’ wish lists when deciding where to live is living in the catchment area of a good-quality school.

In 2015, Opinium Research carried out for Santander found that parents are willing to pay hefty premiums to live in the catchment area of a good school. Speaking of the study’s findings, Santander’s UK MD of mortgages said, “With competition for school places fiercer than ever, parents are making significant financial and lifestyle sacrifices to be within the catchment area of desirable schools. All buyers will have a wish list of what they want their new home to have, and being within a certain school catchment is increasingly common among young families but can often come at a cost.

Good schools help to build communities. Children and parents mix. Sports clubs grow. Parents who are sacrificing financially work extra hours or get second jobs – great for companies who want a steady supply of labour.

Schools Create Jobs

In an era when spending on education (as well as other public services) is being held down, it may seem odd to suggest that schools create jobs. After all, there are plenty of headlines about fewer teachers being employed. However, the reality is that schools need teachers, teaching assistants, counsellors, cooks, playground supervisory staff, cleaners, and so on. And these are only the directly employed staff.

More Jobs Are Created Because Good Schools Help to Grow Local Economies

Schools also contribute to growth in the local economy. School children need to get to school –creating extra work for bus companies and taxi drivers. The ‘Lollipop person’ patrols road crossings.

People who work at the school spend money in the local economy, boosting the trade of supermarkets, bars, cafés, restaurants, and so on. Estate agents get just a little bit busier. Good schools encourage developers to build nearby, creating jobs in construction. With this extra spending in the local community, more new jobs are created, and the local economy grows again.

Further and Higher Education Boosts Potential, Too

The existence of both further and higher education could also be beneficial to property investment potential in a location.

Further education provides educational opportunities after school that are not degree education. Colleges of further education, technical colleges, and adult and community colleges are all examples. These provide places for adults to learn new skills, perhaps those associated with a specific job. Many apprenticeship places provide students to further education establishments to cater to academic needs.

Higher education is usually university-based education – either undergraduate or postgraduate courses. Large universities have large student populations, and very few campuses have the facilities to offer accommodation to all students.

Generally, further education is good for a local economy because it upskills workers – and more highly-skilled workers tend to earn more and spend more.

Large student populations also spend money in the local economy, and they also put a demand for accommodation into the community. Many students stay on in a location after they have graduated – providing higher-qualified workers for 21st-century industries.

Both further and higher education establishments improve local economies in a similar way to how schools do – they all need staff, add to spending in the local economy, and help to create more jobs in and around universities and colleges.

In Summary

Schools and other education establishments can be extremely good news for property investors. The better the schools, the more attractive an area is likely to be to potential tenants and homebuyers. The presence of good schools, colleges and universities promote:

  • Growth in the local economy
  • Growth of local jobs
  • Upskilling of the existing working population
  • Building communities

Local businesses such as supermarkets, convenience stores, sports shops, cafés, bars and bistros benefit from population growth encouraged by good education facilities.

In short, the existence of good schools is great news for property investors.

In the meantime, to discover where the most exciting property investment opportunities are, contact Gladfish today at  +44 207 923 6100.

Warmest Regards,

Ryan Rahnavard


Property Investment

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