House prices in top catchment areas soar as parents race to bag places
House prices in top primary and secondary school catchment areas are now nearly 50 per cent more expensive than the average as competition intensifies amid an increase in private school fees.
The average price of a home in the catchment areas of the top 50 primary and top 50 secondary schools in the UK is £538,490 – 42 per cent higher than the average price of homes currently coming to the market in the UK (£379,517), according to Santander.
“Competition amongst parents to get their child into their top choice primary or secondary school is fierce… Parents are understandably digging deep into their financial and emotional reserves to give their children a great education,” David Morris, Head of Homes at Santander, said.
“It’s clear that this is taking a significant toll on families,” Morris added.
Three-quarters of UK parents would be prepared to pay extra to be in the catchment area of a good school – up 11 per cent on last year, Santander found.
VAT on private schools a major factor
Parents are, on average, willing to pay a 15 per cent premium on properties within catchment areas of top schools, which means stumping up a further £57,000 on a £380,000 property. One in 10 would go as far as paying over 25 per cent extra.
Adam Stiles, Managing Director at London-based Helix Financial Partners, said, said that the government’s decision to place VAT on private education is behind the change.
“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,” Stiles said.
“Sadly, this Government rarely sees past the end of its nose when it comes to the unintended consequences of policies,” he added.
Over a fifth of parents whose children are currently at private school say they have plans to move them to a state school due to higher fees, with two thirds planning to relocate to achieve this, Santander found.
Michelle Lawson, Director at Fareham-based Lawson Financial, said the increasing premium on properties near top schools is “putting pressure on local areas”.
“[It] effectively becomes a property premium tax,” she added.