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Cashing in on Catchment Areas

Monday, 29th July 2013

Categories: Sales Property Prices

Author: Peter Barry

Supply and demand plays a large part in the state of the property market but this is especially pertinent in the capital. Areas constantly move in and out of favour, regeneration is accelerated and people are nudged out to less salubrious postcodes as prices escalate, which in turn pushes prices up in previously neglected parts of London.

The Ofsted factor

Often there is a gradual rise in popularity – and hence asking price – but occasionally an overlooked area can rise to the fore almost overnight, creating a rush of demand, with little stock to supply it. This could be word-of-mouth, as people discover that they can afford larger properties in an adjacent postcode; or it might be an increase in amenities or transport options. However, with good state schools acting like so much gold dust scattered around London, something as simple as an ‘Outstanding’ Ofsted report can push up local housing demand and those fortunate enough to be located in the catchment area might wake up to find their house has increased in value by 50k overnight.
Sealing the deal
When this happens, fraught parents of young children rush to snap up houses as close to the school gates as possible and are prepared to pay over the odds in order to ensure a quality education. Much has been discussed and written about the fairness of a system that enables more affluent parents to essentially buy their way into a catchment area. However for those with the wherewithal and means to do so, it remains a common practise and results in pockets of postcodes enjoying exponential property price growth, whilst streets outside the catchment area struggle to compete.
Developing dreams
This scenario hasn’t gone unnoticed by canny developers who pounce on these prized properties and are able to exceed regular profit expectations by renovating houses precisely to fit the requirements of young families. As school application deadlines approach, people are happy to pay a premium for a newly refurbished family home in the catchment of an ‘Outstanding’ school.