Ensuring your child has the best possible start in life is invaluable, but securing a spot at a quality nursery can be a costly endeavor. With 139 Ofsted Outstanding-rated nurseries across England, each typically accommodating between 35 and 51 children, the competition for places is intense.
Nursery placements are determined by various factors such as sibling connections and special needs, but proximity to the nursery often becomes the deciding factor when there are more applicants than available spots. As a result, many parents are willing to pay significantly more for homes located near top-rated childcare facilities, a phenomenon known as the 'catchment premium.'
According to research conducted by Pepper Money using Land Registry data, properties within the boundary area of an Outstanding nursery sold for £77,926 more than the average price in the wider local authority over the past year — a 16% increase. This additional cost translates into higher monthly mortgage payments, with an estimated £456 added to repayments at a 5% interest rate over 25 years. The increased borrowing also requires approximately £17,300 more in annual household income to meet standard affordability checks.
Over the entire loan term, the true cost of this premium is around £137,000 once interest is factored in, which represents more than a quarter of the average UK property price. In some areas, the difference is even more pronounced.
For example, a home in the KT17 3 postcode sector, near the high-scoring Wallace Fields nursery, comes with a 67% price increase compared to the rest of Epsom and Ewell, equating to a £390,992 premium. Similarly, in Broxbourne’s EN10 7 postcode, families pay 61% or £276,294 more to live close to CofE Primary School. Other areas showing significant premiums include Salford’s M7 4 district (52% or £133,445) and SG13 8 in East Hertfordshire (51% or £257,495).
Verona Frankish, CEO of estate agent firm Yopa, says these figures are “not surprising.” She explains that for many families, access to high-quality early years education is seen as an investment in their child's future, leading to strong demand for homes in these locations.
In her experience, buyers with children often compromise on other aspects of a property to secure a place in the right catchment area. This might mean accepting a smaller home, one that requires more renovation, or even a longer commute.
Poll
Would you consider paying more for a house to live near a top-rated nursery?
- Absolutely, education is worth the investment.
- I would consider it if it's within budget.
- No, I wouldn't prioritize that over other factors.
For sellers, being near a highly regarded nursery can be a valuable selling point. Verona advises highlighting this feature when marketing a property. However, she warns against overstating the chances of securing a nursery place, as admission policies can vary between providers.
She also reminds buyers to be cautious and to verify the latest requirements directly with the nursery, provider, or local authority before committing to a premium price.
Verona adds: “Ultimately, these findings reinforce a trend we’ve seen across the property market for decades. Families are often prepared to pay a considerable premium for locations they believe will offer the strongest educational opportunities for their children, and that demand continues to be reflected in house prices.”
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