House prices in areas close to the country’s best state schools are on the cusp of a boom, property experts are predicting.
Estate agents are already getting calls from parents who are looking to move within the catchment areas of good state schools in the run up to the General Election.
That is because Labour has confirmed it would start charging VAT on private school fees should it win, which would hike the cost of a private education by an extra 20 per cent as soon as September.
According to research by education consultancy Baines Cutler, around 224,000 pupils currently in private school may end up transferring into the state sector because parents can no longer afford the fees.
Property experts have told the Mail how and when they expect house prices to move in the catchment areas of England’s top schools.
The Mail has also compiled a definitive list of every school in England that has been rated outstanding by Ofsted and the current rental and house prices in their surrounding areas.
Search our interactive list below of every outstanding school in England and property prices nearby
House prices in these neighbourhoods are expected to surge over the coming years, as families who can no longer afford private school attempt to move within the catchment area of good state schools, experts say.
Similarly, rental prices will also rise in these areas as competition increases.
Many parents are likely to look to the top state schools but would need to ensure they are within their catchment areas for their children to be admitted.
The effect on house prices in catchment areas where state schools are rated ‘outstanding’ by Ofsted would be dramatic, estate agents say.
Aneisha Beveridge, head of research at Hamptons estate agency, says: ‘There’s always been a close connection between the quality of schools and the local housing market.
‘The proximity to top-tier state schools is a powerful draw for families keen to provide the best education for their children which, in turn, has elevated house prices within catchment areas.
‘With Labour so far ahead in the polls, we’ll likely see more moves of this kind in 2024 as families try to pre-empt any future policy.’
With Labour planning to start charging VAT on private school fees should Sir Keir Starmer be elected prime minister, concerned parents are already looking for houses in the catchment areas of some of London’s best state schools
Last year 44 per cent of homes in the same postcode as an outstanding secondary school sold after a bidding war having received offers from three or more buyers, Hamptons figures calculated for Mail Plus show.
Homes near top-rated state schools have also defied wider price falls.
Last year the average cost of a detached home near an outstanding secondary school rose 3.6 per cent year-on-year, outperforming the rest of the market.
Prices of detached homes in the proximity of a school rated ‘inadequate’ fell by 1.2 per cent over the same period.
Houses close to outstanding secondary schools cost an average of £540,350, representing an 8.1 per cent premium over the wider local authority average of £499,790.
More than one in ten – 12 per cent – detached homes close to an outstanding secondary school now costs over £1million, the highest proportion on record and up from just 3 per cent a decade ago.
Edward Heaton, founder of estate agency Heaton & Partners, which has offices across the south of England, says he has already had calls from parents looking to move ‘because they can ill afford a hike in school fees’.
‘But with all the other increased costs they have had to absorb over the last couple of years, it’s the hard-working plumber or entrepreneur whose children will suffer rather than wealthy bankers and their even wealthier clients,’ he adds.
Henry Pryor, buying agent and property expert, said there is ‘bound to be’ an impact on house prices in some catchment areas but said it should be ‘very localised’.
‘There will be some parents who will spend more than the VAT increase to get the right address, but they will probably get it back when they sell,’ he adds.
Tom Bill, head of UK residential research at Knight Frank, says buyers are already more proactively targeting catchment areas of the best state schools in anticipation of the VAT changes.
He says: ‘Any premium that currently exists, which is typically more noticeable around primary schools, could therefore be pushed higher.’
Could moving within the catchment area of a good state school save you money?
Some parents may be willing to pay a premium on a home near a good state school because would still save them more money than opting for a private school once the VAT has been added.
Private school fees are around £18,000 on average for day pupils. With VAT, that could be closer to £21,600. That would amount to around £151,000 for one child for seven years.
Education consultancy Baines Cutler has warned Labour’s plan could lead to around 224,000 pupils currently in private school transferring into the state sector because parents could no longer afford the fees
Jennie Hancock, director of West Sussex estate agents Property Acquisitions, says: ‘Those with young children will be looking at the additional costs and deciding it’s best to invest some of the money they would have spent on private schooling into purchasing a house in the catchment of a good state primary and secondary.
‘Even paying a premium of 15 to 20 per cent will leave them with a substantial saving overall.’
She adds that the true impact of higher school fees on the housing market wouldn’t be felt until 2025/26 and over the decade that follows.
‘Protecting children’s schooling from disruption is one of the most important considerations for any parent,’ she says.
‘There are certainly thousands of families who stretch themselves financially to afford private schooling but I expect many will be willing to pull whatever financial lever is necessary to ensure their children can stay put for as long as possible.
‘That could mean extending their mortgage term, going interest-only, or asking grandparents for help.’
For those genuinely concerned and thinking about moving, now is a good time, according to Bruce King, director of Saffron Walden-based estate agent Cheffins.
‘With interest rates stabilising and inflation easing, there is confidence in the market, and we don’t expect the election to have a huge impact on prices,’ he says.
Marc Schneiderman, director of central-London estate agent Arlington Residential, says that homeowners who live within the catchment areas of good schools could make a good return by selling up if they have no school applications on the horizon.
‘We are already getting calls from concerned parents who feel they will be unable to cover the additional costs and are therefore looking for property in the catchment areas of some of London’s best state schools,’ he says.
‘It certainly is a good time to sell in those areas. Without exception every property we have sold in that last three months has received offers from more than one buyer.’