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Before the year 2000, property prices maintained a steady ratio, relative to income. In other words, the average house price was about 3.5 times the average person’s salary – and it had been for many decades up until that point.
But then, when central banks began printing money like there was no tomorrow, things changed. All of a sudden credit became cheaper and property owners were able to push up their prices. Buyers could afford to pay more.
Today, the average price of a property is around six or seven times annual income, meaning that we’re in uncharted territory. Where prices will go from here is anyone’s guess.
If you’re investing in the property market but are worried about this trend, then this post is for you. In it, we describe how buying near a school will likely protect you from house price declines, regardless of what the Fed decides to do.
The Reasons For Buying Near A School
While the rest of the world continues to change beyond recognition, schools remain almost untouched by the passage of time. It doesn’t seem to matter how much the economy adjusts or how many jobs go digital, school is school, and will probably remain so for many years to come.
Because of that fact, the way parents organize their lives is unlikely to change considerably in the future. Yes – the job market will continue to evolve. But the need to be close to schools will not. And because of this, people will always be willing to pay a premium for well-positioned properties.
What’s going on here? Well, it all has to do with the convenience of certain property locations. Imagine if kids could just walk out of the front door, roll into school, and then walk a few meters home. That saves parents an enormous amount of time and money and prevents the need to make trips across town. And that’s going to be something that buyers want both now and into the future.
If you click here, you can see property prices and how they vary as you move across a typical town. You’ll see that there are pockets of affordability while also locations where prices seem to shoot up, usually because of location.
Are There Any Downsides?
So, are there any downsides to buying a property near a school?
Well, one issue is the increased traffic. If you’re right next to the school gates, things will get busy twice a day. Plus, you’ll also have people floating around until later on in the evening for school clubs.
The other big downside is noise. If you’re within a couple of hundred yards of the school, you’ll hear children playing at lunchtime. And vast gaggles of students will mooch past your front door, chatting loudly on a daily basis.
Sometimes, it can be harder to sell a property near a school as well, even though you can charge a premium. That’s because there are fewer buyers in the market for premium locations like these. Remember, many property buyers don’t have school-age children.
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