The introduction of VAT on private school fees has heightened competition for the best state schools, meaning in some areas buyers would be willing to pay an average of £40,500 more for a property.
This is according to research by Santander, which found increasing numbers of parents would be willing to pay a 15% premium on their home to secure a place at a top school.
The research found 73% of parents would be willing to pay the premium to live in the desired catchment area – this is up from 63% last year.
This spike comes just months after the introduction of VAT on private schools which has seen school fees climb by up to 20% for many families.
Indeed, Santander said competition for places looked set to increase as 21% of private school parents planned to move their child to a state school to avoid the higher fees.
On average, the research found, parents would be willing to move over 30 miles to be closer to the best primary or secondary schools in the UK.
And of those parents who are moving their child from private to state education, over two thirds (69%) said they will relocate to get their children into the best state school catchments.
As a result, parents who had their eyes set on a state school were reporting added concerns for the future. Almost half (46%) said they were worried they would now have to compete with those who will no longer be taking up a private school space.
And there’s an additional problem. Whilst many parents would be willing to pay 15% more – in reality the price of homes in the most desirable catchment areas were 42% higher, according to Santander’s research.
For the top 50 primary and top 50 secondary schools in the UK the average price of a home was £538,490 – 42% higher than the average house price in the UK £379,517.
Parents ‘play the system’ to secure a school place
The findings of the report have been supported by mortgage brokers, who have noticed some families take drastic steps to secure their child’s school place.
David Stirling, independent financial adviser at Belfast-based Mint Wealth, speaking to the Newspage agency, said some parents were now playing the system to secure their children’s futures.
“Parents can feel desperate when considering their children’s futures and wellbeing, so those in a position to work the system will,” he said.
“I have had a client look to purchase a buy-to-let property within a school catchment area, simply to have a registered address to be able to apply to the school.
“Similarly, I’ve seen others consider a small rental property away from their main residence to have a footprint and address registered near a top school. People are resorting to desperate measures to hopefully reap the rewards.”
Meanwhile, others were concerned about the impact it would have on the property market as a whole.
Adam Stiles, managing director at London-based Helix Financial Partners, also speaking to Newspage, said: “Sadly, this government rarely sees past the end of its nose when it comes to the unintended consequences of policies.
“The burden now placed on the state school system by imposing the politically motivated VAT on private education has not only seen many private schools shut but is now pushing house prices up to unaffordable levels for the public as a whole.”
The government’s introduction of VAT on school fees was one of its manifesto pledges and the aim was to raise money to recruit more teacher for state schools. The policy proved highly controversial and was challenged at the High Court. The challenge has since been dismissed.
