The threat of VAT on school fees will create unprecedented competition for families looking to move into an area with a good state school, according to leading estate agents Winkworth.
Chief Executive Dominic Agace told Winkworth’s Property Exchange podcast: “Some people are downsizing to release funds to cover school fees. We will also start to see people investing in what they would have paid in school fees into a house near a good state school. We will see a premium stretch to buy a house in the right location, whether that’s for primary or secondary. We could see up to a 20 per cent premium for homes in the catchment areas of good schools. We will also see people moving to the country to areas with good local state schools where they can still connect into London or where they will get more for their money, enabling them to still afford school fees.
“Parents are facing a big squeeze in all directions - a home with some space for children while factoring in education and increased mortgage costs, while trying to save some money for retirement – it will cause stress. The schools factor is going to be a long term trend and buyers need to think about making that move now as demand will increase.”
Winkworth’s Farnham office is in the heart of the Georgian market town in commuter Surrey and surrounded by excellent state and private schools. Henry Griffin, of Winkworth Farnham, told the podcast: “It is extraordinary the lengths parents will go to in order to get their children into an outstanding state school. We had a family who were outside the catchment area of Weydon Academy, which is rated no 1 in Surrey and sixth in the country. They rented out their house and then rented a house in the Weydon catchment to secure the place before selling and make the move permanent. The average price of a detached property in Farnham is around £850,000. Within the catchment of the highly popular South Farnham Junior School and Weydon Academy, the price is more likely to be over £1m to £1.25m.”
Melanie Sanderson, Managing Editor of the Good Schools Guide, said:” We have seen a slight decline in registrations for private schools, but we still don’t have all the detail on the VAT changes to private schools. Parents can take comfort from the fact that many private schools are no longer going to be full. It will become more of a buyers’ market. Some schools are very wealthy, others are running on a shoestring budget and therefore some schools may pass on the whole 20 per cent on to parents. My advice to parents considering the private option should ask the school: what does your business plan look like, what’s your financial model?”
Melanie also revealed some interesting research. She told the podcast: “It’s also important to consider that high performing schools aren’t necessarily out of reach. The Good Schools Guide did some research and looked the level of applicants for high performing primary schools last year.
In London and between the commons in SW11, there is Bellville school, a large primary school which is very popular among local parents. 180 children applied for a first choice place last year and there were 100 places. Honeywell is another sought-after school in Battersea. There were 90 places, with 104 first choice applicants. In Farnham in Surrey, South Farnham junior school has 90 places and 96 first choice applicants last year. Your chances of getting in are pretty good.”
