Parents paying up to £45,000 more to buy into ‘good’ state school catchments after VAT on fees

New research and official house‑price data indicate parents are increasingly prepared to pay a significant premium — around 15% or roughly £45,000 on a typical UK home — to secure places in Ofsted‑rated good state schools, a shift driven in part by the government’s 2025 removal of the VAT exemption on independent school fees.

Parents are increasingly prepared to pay substantial sums to secure a place for their children in a desirable state school catchment, with recent reporting citing an average willingness to pay roughly 15% more for a home in the catchment of an Ofsted‑rated “good” school — approximately £45,000 on top of the typical UK property value. That figure sits alongside official house‑price data showing a July 2025 typical property value of £298,237, underlining how education priorities are now a material factor in many families’ housing decisions.

The appetite to buy into a preferred catchment is striking. Surveys referenced in the press indicate that almost three in four parents say they would pay over the odds to live where their children would be prioritised for a school place, up from lower levels reported previously. Regional breakdowns amplify the pressure in already expensive markets: buyers in London face the largest cash premiums, while parts of the north and the north‑east show much smaller uplift on average. Santander’s commentary accompanying its research highlights the emotional as well as financial stretch for families, and a spokesperson told the press that stabilising interest rates and a rising flow of properties to market could make it easier for some parents to secure an “outstanding” home in their dream catchment.

Policy change is a key driver behind the shift. The government removed the VAT exemption for independent school fees with effect from 1 January 2025, meaning a standard 20% rate now applies to most private school payments. The change — a high‑profile manifesto pledge that was implemented after ministers set out transitional arrangements for pre‑payments — was justified by the Treasury as a means to raise revenue for public services, including schools. Analysts and parliamentary briefings have explained the detail of the measure and flagged consequential pressures on households and on the independent sector’s finances.

Those pressures are already showing through in parental choices. Industry reporting and polling point to thousands of pupils leaving the independent sector since the VAT change, and a sizeable minority of parents say they are considering moving their children into state education in response to higher fees. In turn, many of those parents say they will attempt to relocate into strong state school catchments rather than pay increased private fees — a behavioural shift that helps explain rising buyer competition in particular areas. At the same time, other research from Santander carried out earlier found a smaller, concentrated “top‑schools” premium — reflecting how different methodologies (for example, examining the top 500 primary schools outside London versus a broader definition of “good” schools) produce different estimates of the house‑price uplift.

There are, however, important caveats that temper the headline numbers. Not all state schools operate strict geographic catchments; some admit by test or other criteria, and catchment boundaries and Ofsted ratings can and do change. Admissions policies can prioritise within a catchment by test scores or other factors, and where a school becomes oversubscribed a nearby address does not guarantee a place. Analysts warn that these dynamics mean any “catchment premium” can be volatile: a house bought at a premium because of its school could lose that advantage if the school’s status or admissions arrangements change.

The effects are social as well as fiscal. Surveys feeding into the industry commentary show parents reporting increased stress during applications, with some considering home‑schooling or feeling the social strain of competition for places. Many families say they would be willing to uproot — the average intended relocation distance reported in the latest surveys has increased year‑on‑year — and a non‑negligible share say they would sell their home to secure a place in a preferred school.

Market context matters to how long the squeeze might last. Halifax’s house price series shows modest growth in mid‑2025, and banks and estate agents point to growing supply and easing mortgage market conditions relative to the peak of the cost‑of‑living crisis. Santander’s housing experts have suggested that a combination of more properties coming to market and stabilising borrowing costs could help some buyers capture catchment advantages without overstretching budgets — although that is a prospective, company‑sourced view rather than an established trend.

Taken together, the data and the policy environment point to a sustained interplay between schooling choices and housing demand: fiscal policy has raised the stakes for some families, and that is feeding through into where people choose to live — and how much they are willing to pay. At the same time, methodological differences between studies and the mutable nature of school admissions mean the true scale of any “school premium” varies by place and over time, and buyers should treat premiums as neither guaranteed nor permanent.

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Source: Noah Wire Services

Noah Fact Check Pro

The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.

Freshness check

Score:
8

Notes:
The narrative presents recent data on parents paying premiums for properties in good school catchment areas. Similar findings have been reported in August 2024, with Santander’s research indicating a 5% premium, equivalent to £21,215, for homes within the catchment areas of top state primary schools outside London. ([santander.co.uk](https://www.santander.co.uk/about-santander/media-centre/press-releases/parents-face-5-premium-on-properties-within-catchment?utm_source=openai)) The 15% premium mentioned in the narrative is notably higher than previous reports, suggesting a more recent development or a different methodology. However, the absence of a specific publication date for the narrative makes it challenging to assess its freshness accurately. The presence of updated data alongside older material may indicate an attempt to provide a more current perspective, but this should be flagged for further verification.

Quotes check

Score:
7

Notes:
The narrative includes direct quotes from a Santander spokesperson regarding the impact of VAT changes on parental decisions. Similar sentiments have been expressed in previous reports, such as those from August 2024, where experts discussed the potential impact of VAT on private school fees on housing markets. ([telegraph.co.uk](https://www.telegraph.co.uk/money/property/parents-21k-premium-live-near-top-state-school/?utm_source=openai)) The exact wording of the quotes in the narrative matches earlier reports, indicating potential reuse of content. However, without access to the original source, it’s difficult to determine if these quotes are directly lifted or paraphrased.

Source reliability

Score:
6

Notes:
The narrative originates from the Daily Mail, a reputable UK newspaper. However, the specific article is not accessible due to website restrictions, making it challenging to verify the content directly. The reliance on a single source without corroboration from other reputable outlets raises concerns about the reliability of the information presented.

Plausability check

Score:
7

Notes:
The claim that parents are paying a 15% premium for properties in good school catchment areas is plausible, given previous reports of significant premiums. For instance, a 2013 study found that parents were paying up to 40% more to live near top state primary schools. ([telegraph.co.uk](https://www.telegraph.co.uk/finance/property/buying-selling-moving/10475309/Exclusive-the-schools-that-command-the-highest-postcode-premiums.html?utm_source=openai)) The narrative also mentions a policy change regarding VAT on independent school fees, which aligns with recent government announcements. However, the lack of specific details and the absence of corroborating sources make it difficult to fully assess the plausibility of the claims.

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary:
The narrative presents claims about parents paying a 15% premium for properties in good school catchment areas, with references to recent data and policy changes. However, the absence of a specific publication date, reliance on a single source, and potential reuse of quotes from earlier reports raise concerns about the freshness and originality of the content. Further verification and corroboration from additional reputable sources are needed to fully assess the accuracy and reliability of the information presented.