It has looked at 139 Ofsted ‘Outstanding-rated’ nursery catchments in England and discovered properties close by could command prices which were 67% higher than the broader council area surrounding them.
In 37% of cases, families paid a considerable premium to live within walking distance.
The average price increase was £77,926, a 16% uplift on the broader local authority price.
And this, said Pepper Money, was adding around £456 to monthly mortgage repayments and requiring roughly £17,300 more in household income to pass a standard affordability check.
Which areas have the highest nursery property premiums?
According to Pepper Money’s analysis Chelsea is the priciest for parents buying within the catchment of an ‘Outstanding’ nursery. Parents here pay £658,408 more than those buying elsewhere in the district.
Epsom and Ewell in Surrey came second, with a 67% uplift translating to a £390,992 premium, while Broxbourne in Hertfordshire followed closely with a 61% premium of £276,294.
Whilst, unsurprisingly, the London boroughs feature heavily in the top ten, other areas with a hefty premium outside of the capital include Salford, where families pay 52% more, and Sheffield were there’s a 41% uplift.
Almost one in three Outstanding nursery catchments in the North carry a property premium, Pepper Money reported, with the biggest in Salford at £133,539 above the borough average.
The Northern catchment premium averages around £37,000, roughly 40% smaller in cash terms than the rest of England, but the percentage uplift is almost identical. So, while Northerners can expect to see premiums, these are considerably lower than those of their Southern neighbours.
Paul Adams, sales director at Pepper Money said: “Parents understand that the right nursery matters, and the data confirms what many already suspected – in more than a third of outstanding-rated catchments, that choice comes with a meaningful price attached.
“An average premium of around £78,000 translates into roughly £450 more per month on a standard 25-year mortgage, and around £17,000 of additional household income is needed to pass a typical affordability test.
“For self-employed parents, contractors, those returning after parental leave, or households with a few historic credit blips, the door can quietly close at exactly this point.
“A specialist lender looks at the income a family actually lives on, not just what a tick-box assessment captures – and that distinction can be the difference between ruling a postcode out and finding a way in. The most useful first step for anyone in this position is a proper affordability conversation before the catchment is written off.”