Determined parents are pushing up prices in desirable locations by almost £27,000, according to the latest data on the extreme lengths families will go to in order to secure a place for children at their preferred school.
One in four parents with school age children have either bought or rented a new home to avail themselves of the right address for a particular catchment area and were willing to spend an extra 12 per cent on top of the market value of a home for the location – worth just under the average full-time salary of £28,200 before tax according to research from Santander Mortgages.
Half sold their previous home to move, a third bought a second home and a fifth are renting.
The financial burden is a huge one, with a quarter of parents admitting they are overstretched on their mortgage.
A fifth of those who moved for the sake of their children’s education have had to change jobs, a further fifth have had to downsize.
But this is a temporary move for many, and while a quarter of families will leave the area once their child leaves school, an astonishing four in 10 plan to move out as soon as their child has secured a place. In London, two thirds of parents will leave as soon as the paperwork comes through.
“A school with a good reputation can cause mayhem in a local property market,” says Jeremy Leaf, an estate agent in north London and a former residential chairman of the Royal Institution of Chartered Surveyors.
“Buyers with children of school age will do and pay anything to get their children a place. It is quite normal for buyers to check the local Ofsted reports before they read the particulars for their preferred properties. The education effect on property prices can extend well beyond the school run boundaries.”
Mr Leaf adds: “Given that the cost of moving is so high – as well as the premium charged on a property in a good catchment area, there is also stamp duty, legal fees, mortgage and removal costs etc to consider – it is surprising that parents would be prepared to move on again so quickly.
“It is worth noting that catchment areas can expand or shrink according to a school’s popularity so if a buyer pays a premium to live within a catchment area, there is a risk that when they sell their property it may not command a similar or greater premium.
In London, with a third of all parents saying they have bought or rented a particular property because of the schools, the infamous catchment premium pushes prices with the right addresses up by a staggering £81,000 – around 17 per cent of the £480,000 average property price.
But this certainly isn’t a South of England phenomenon. In the North-east, where almost four in every 10 parents have bought or rented property for the local schools, the premium is worth 14 per cent of the local property prices, at £18,200.
And in the East of England, despite only one in 10 families moving for the catchment area, the premium adds around £29,000 to the typical £287,000 property price, wiping out a full time worker’s gross salary for a full year.
Earlier this year, a similar study by Rightmove which analysed the prices of properties in key catchment areas (rather than what premium parents have or would be prepared to pay) placed the typical nationwide catchment area premium around schools assessed as “outstanding” by Ofsted at £52,000.
With less well-off parents effectively priced out of good state schools, experts warn that such premiums only add to education, earnings and social mobility problems and barriers faced by disadvantaged households.
(Figures out this week from the Child Poverty Action Group suggest that currently, families in which both parents work full time for the national living wage are 13% or £59 per week short of what they need to give their children a minimum living standard.)
And yet for parents with the means and determination, these premiums are a drop in the ocean compared with current independent school fees.
Around 654,000 children are in private education in the UK at an average cost of £14,100 a year, up by more than 70 per cent in the past 14 years as wage growth and the cost of living have remained low.
Paid out of net income, it means lower rate taxpayers need to earn an additional £17,630 and higher rate payers £23,300 to be able to send one child to an independent school.
For boarding pupils, the net cost rises to £32,280, according to this year’s data from the Independent Schools’ Council.