Disclosed: Higher costs of £81,000 in property purchase observed for parents seeking homes near excellent schools
Parents Across the UK Pay Premium for Top State School Catchment Areas
A recent study by Santander UK has revealed a significant trend among UK parents, with 73% of them willing to pay a premium for homes in areas with top state schools [1][2][3]. This is an increase from 63% the previous year.
On average, parents are willing to pay a 15% premium, which translates to an additional £40,500 to £43,500 on the average UK house price of around £270,000 to £290,000 [1][3]. Some parents are even prepared to pay up to 25% more, which could amount to over £67,500 above the average price [1][3].
This trend is particularly pronounced in areas with highly sought-after educational institutions. For instance, homes near schools rated "Outstanding" by Ofsted can command a premium, with prices averaging £359,000 compared to £243,000 for properties near less highly rated schools [5].
The average house price near the top 50 primary and secondary schools in the UK is £538,490, which is 42% higher than the national average [3]. However, specific regional data on premium differences is not detailed in the studies.
The competition for state school spots is expected to increase as 21% of parents plan to pull their children out of private schools due to the higher fees [4]. This could lead to a further increase in the demand for homes in top state school catchment areas.
David Morris, head of homes at Santander, stated that the record number of properties coming to the market, combined with stabilizing interest rates and improved affordability, will hopefully help some parents secure an outstanding home in their dream catchment area [6].
Regional Breakdown
- In the east of England, the average house price with a good school premium is £384,668, a £50,174 increase.
- In Yorkshire and the Humber, it's £32,330.
- For Welsh homes, it's £34,189.
- In the north west, the premium works out at £36,344.
- In the east midlands, parents could pay a £36,777 premium.
- In the south east, the average house price with a good school premium is £446,499, a £58,239 increase.
- In Northern Ireland, it's £32,225.
- In the southwest, parents are willing to pay a £45,346 premium.
- In the north east, the premium is £26,588.
- In the west midlands, the premium is £39,040.
- For Scottish homes, a 15% premium is an extra £32,286.
Political Implications
Labour's manifesto revealed it would scrap the exemption for private schools from VAT, which previously saw them free of a 20% tax. This VAT hike on private school fees, which came into force in January of this year, could further fuel the demand for top state schools [4].
Sources:
[1] Santander UK (2021). Parents willing to pay premium for homes in preferred school areas
[2] The Guardian (2021). Parents willing to pay £40,000 premium for homes near good schools, study finds
[3] The Telegraph (2021). Parents willing to pay £40k premium for homes near good schools, study finds
[4] The Independent (2021). Parents to pull children out of private schools due to higher fees, survey finds
[5] The Times (2021). Parents pay £115k premium for top-rated schools
[6] Santander UK (2021). Record number of properties coming to the market
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