Parents face a 5% “school catchment premium” equivalent to £21,215 to live near a top state primary school, according to analysis by Santander.
The bank found that homebuyers are moving up to 25 miles to bag themselves a property in their preferred catchment area.
The figures come as private schools prepare to put their fees up, following the government’s decision to apply VAT to fees from January.
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There are concerns that house prices near top state schools could balloon further as some families pull their children out of private schools due to the fee hike, and move closer to highly-rated state schools.
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The Santander analysis also found a significant increase in the number of parents willing to pay a premium for a home near a good school. Almost two-thirds (63%) of parents either paid or would be willing to pay extra to buy a property within their desired school catchment area, up from 26% five years ago.
The bank said this suggests a shift in the priorities of UK homebuyers, with proximity to schools emerging as a critical factor for both men and women.
“This surpasses other traditional considerations such as good transport links and closeness to friends and family, marking a notable trend in the housing market,” it noted.
“A stressful time for parents”
As families get ready for the start of the new school year, the analysis lays bare the stresses involved with choosing a school.
One in five parents reported stress, with one in 10 experiencing difficulties concentrating at work or suffering sleepless nights during the school application period, according to Santander.
Parents on average are willing to relocate up to 25 miles to move to their preferred catchment area, similar to moving from Leeds to York. One in 10 would consider relocating over 40 miles, the equivalent of relocating from Birmingham to Leicester.
Almost one in five (19%) of parents said they were willing to have fewer or no holidays to afford the move, while 20% said they would also stretch their finances to make the move happen.
What’s more, nearly a fifth (18%) of parents would sell their house to move to their desired catchment area, up from 13% five years ago.
“Moving could be more affordable than you think”
While Santander calculated that parents looking to send their children to one of the top 500 state primary schools outside of London are hit with a 5% premium on properties within the school’s catchment area, parents actually reported that they would be willing to pay 12% extra.
Graham Sellar, head of mortgage development at Santander, comments: “It’s clear that nabbing a sought-after primary school place for your child is playing an increasingly significant role in the property market for parents.
“With almost a fifth of people up for taking the plunge and moving homes to secure their child a school place, it’s no wonder that this has created a sizeable ‘school catchment premium’.
"However, with parents willing to pay more than double the current premium to get into the area, along with prices remaining largely flat over the past 12 months and mortgage rates lower than last year’s highs, parents might find moving more affordable than initially expected.”
Figures from Zoopla released today (28 August) show that house prices have risen only 1.4% during the first seven months of 2024.
The annual (12-month) rate of growth is lower at 0.5%, because it includes price falls over the latter part of 2023.
But, will private school fee hikes increase the premium?
Separate data by the estate agent Yopa supports the idea that the best state schools command a hefty house price premium - and Yopa warns that the premium could grow due to the private school fees hike.
It analysed housing market data for almost 18,500 schools across England and found that higher house prices generally correspond with better schools.
Homes cost an average of £359,000 near schools rated as “outstanding”, £305,000 near “good” schools, £277,000 in postcodes where a school “requires improvement”, and £243,000 for schools labelled “inadequate”.
Therefore it costs £116,000 more to live near an “outstanding” state school compared to “inadequate”, on average.
Verona Frankish, CEO of Yopa, comments: “Labour’s move to scrap VAT tax relief on private schools will make attending more expensive, which could persuade more parents to put their children into highly-rated state schools.
“Living near a good state school already commands a premium, and if more are persuaded to move nearby that could cause the gap in price between the best and worst schools to further widen.”
If you’re worried about rising private school fees, check out our tips in our managing higher school fees article.
