Surge in Demand for Homes Near Top State Schools Amid Private Education Tax
Competition intensifies for properties near outstanding state schools as government policy on private education fees prompts shift. Experts warn of potential impacts on housing market and school admissions.
The UK housing market is experiencing a notable shift as demand surges for properties near top-rated state schools. This trend comes in the wake of the government's controversial decision to impose a 20% Value Added Tax (VAT) on private school fees starting January 2025.
According to data from estate agency Hamptons, nearly one-third of homes sold near state schools rated "outstanding" by Ofsted received three or more bids in the past six weeks. This figure is 40% higher than the market average, indicating intensified competition in these areas.
The Institute for Fiscal Studies (IFS) projects that up to 40,000 private school pupils may transition to state schools due to the new tax policy. This shift is already evident in Surrey, where schools reported almost 600 inquiries about state school vacancies in just two weeks.
Concerns are mounting among education professionals. Headteachers, bursars, and governors from approximately 50 schools have warned the Treasury about the potential for state schools to be "overwhelmed by a mid-year surge in demand for school places that has not been forecasted."
The impact is particularly noticeable in Kent, which boasts nearly 40 grammar schools – the highest concentration in any local authority in Britain. Linda Wesson, prime director at Hamptons in Sevenoaks, reports frequent inquiries from private school families seeking to relocate for access to Kent's state schools.
Interestingly, the trend extends beyond local movements. Wesson notes, "Since the election, we are now getting inquiries from families from south-west London. We are getting a lot of inquiries from families in Richmond and Putney, and they all want advice on primary schools and grammar schools."
A recent study by wealth management firm Saltus reveals that 13% of private school parents plan to move their children to state schools this academic year. Moreover, 10% are considering leaving Britain altogether due to the tax policy.
Mike Stimpson, a partner at Saltus, attributes this to the government's decision to implement the VAT policy midway through the school year, which he describes as "understandably unpopular."
The housing market is already reflecting these changes. In the past 12 months, homes in the same postcode sector as "outstanding" state schools averaged £382,310, commanding a premium of £38,580 compared to areas with "good" schools and £83,360 more than areas with schools that "require improvement."
Wesson predicts a potential surge in house prices next summer as more families relocate for free schooling, potentially having "more money to spend on buying larger houses."
As the UK education landscape evolves, the ripple effects on the housing market and school admissions process are becoming increasingly apparent. This situation underscores the complex interplay between government policies, education choices, and property markets in the UK.
