Never underestimate the pulling power of a great state school. Private school fees have risen by an average of 41 per cent in the past five years, according to Halifax Financial Services, and continue to rise at rates that outstrip general inflation. For parents feeling the pinch, the value of good, free education is higher than ever.

The difference between the value of homes in areas with good state schools and those without is at least 12 per cent, according to research by Savills and Halifax - and it is widening quickly. Martin Ellis, chief economist at Halifax, says: “Private school fees are going to be one thing that people will be asking if they can afford, and that could put upward pressure on prices near good state schools.”

The weakening housing market is also accentuating this divide because prices around popular schools prove more resilient in a downturn. “The effect of a good state school in some areas is staggering,” says Liam Bailey, head of residential research at Knight Frank. “Ripon is a good example. It has a very good state grammar school, and it is the only part of North Yorkshire that is not seeing price falls.”

Buyers must already compete with savvy, cashed-up rivals, who will have been poring over school reports and admissions policies, hoping to gain every advantage, but the complex business of securing a place is getting even more difficult. Bailey says: “As demand to get into a school increases, the catchment area from which the school will accept pupils becomes smaller. Competition for properties in these areas is intense - even in this dire market.”

Colyton, East Devon, is one example of a housing market that has been transformed by the presence of a top-ranked school - in its case the only grammar school in a 50-mile radius. Ian Lange, of Humberts in Honiton, East Devon, says: “Colyton Grammar is regarded as one of the country's best schools. As a result, this small country town enjoys a buoyant market throughout the year.” Colyton does not have a catchment area, but people will still move to be within an easy commute. The result? Buyers will choose the elegant former wool town over neighbouring Seaton, despite it being by the sea, and have been known to pay £50,000 more, or an average £350,000, for a typical family home there.

Where catchment areas exist, the difference in house prices is equally clear. Robin Thomas, of Strutt & Parker in Exeter, says: “We have grammar schools in Torquay, Plymouth and Colyton and there is a premium on family houses of 10 to 15per cent where catchment areas apply.” Lincolnshire is also highly regarded for its schooling; Dan Waller, of Humberts in Lincoln, says that excellent grammar schools throughout the county have boosted villages such as Scothern and Bassingham.

But not all homes near state schools carry a similar cachet. Globrix, the property search engine part-owned by News International, parent company of The Times, found some evidence of lower prices in areas that were too close to some busy schools - it attributes this to “traffic congestion, difficult parking and the fact that many schools were built in cheaper areas in order to save costs”. And the type also dictates the premium a property enjoys. Lucien Cook, director of research at Savills, explains: “Where state schools are concerned, educational standards become a strong driver of demand for good three-bedroom homes within the catchment area.” Hence, the values from smaller homes and for flats in these areas can languish - just as demand heats up for the bigger and better homes that appeal to cash-strapped but no less ambitious parents.

Case study

Parents who dig deep to live in the catchment area of a good school may still have to fight to ensure their children have a place. Martin Trippick, a manufacturing engineer, and his wife Katrina, a teaching assistant, bought a three-bed semi in the Cotswolds village of Mickleton, Gloucestershire, to ensure that their children - Vanessa, 11, Colette, 9, and Keiran, 6 - could attend the excellent local primary school. But the family, left, was able to relocate only in April, once their previous home was sold. This had serious consequences: by the time they were able to prove their new residency with evidence of exchange of contacts, space at the school remained for only two children. The family successfully appealed the decision - but their negotiating skills were again tested when Vanessa lost out on a place for the following school year at the oversubscribed Chipping Camden High School; the alternative school was 20 miles away in Tewkesbury. Katrina Trippick advises: “If you are refused, don't give up. See the head teacher before you apply to state your case. If possible, provide references from your previous schools and from people who know you as a family.”

Some of the best catchment areas:-

1 Lancaster

Top state schools: Lancaster Royal Grammar School (boys); Lancaster Girls' Grammar School; Queen Elizabeth School, Kirkby Lonsdale (co-ed).

Catchment area price premium: 10 per cent

“This is a popular area for schools,” says John Harrison, of Bairstow Eves, Lancaster. “Houses in the catchment area for the boys' grammar are particularly sought-after as they are in a nice part of town. Sellers are certainly likely to achieve closer to their asking price in the catchment areas than outside them. A lot of people move to Kirkby Lonsdale for the school; terraced houses which would normally cost £250,000 sell there for £475,000.”

2 Newport and Telford, Shropshire

Top state schools: Adams' Grammar School, Newport (boys); Newport Girls' High School; Thomas Telford School, Telford and Wrekin College, Telford (co-ed).

Catchment area price premium: 15 per cent

“We are extremely lucky in our schools,” says Belinda Hutchinson-Smith, of Savills, Telford. “Anything within a ten-mile radius of Newport is hugely appealing for families. I would say that the majority of our buyers are families moving here for the schools. That is the first priority for a high number of our inquiries. It seriously affects demand. Parents will pay a premium to be in those areas. We even get people moving from the South because of our schools.”

3 Birmingham

Top state schools: everywhere you turn. The grammars are led by the five schools of King Edward VI, and the community colleges by Tudor Grange School, Solihull, and Fairfax School, Sutton Coldfield (both co-ed).

Catchment area price premium: 20 per cent

“There is no doubt that people are drawn to areas near very good state schools, and that their search has to be within very tight catchments,” says Stuart Flint, of Knight Frank's Birmingham office. “We have a large number of people registered with us who have put the schools criteria at the forefront of their requirements. People do pay a premium to live in catchment areas: 20 per cent may sound a lot but it's not compared to annual school fees, and you're buying an investment. There's a micromarket in catchment areas where people will pay more, negotiate less hard and make more compromises.”

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