Will parents move to areas closer to Outstanding/Good schools rather than pay VAT

[LadyConfused2024]

Sorry for the long message. This really? Do you think many parents will sell up/rent near a better school and take their kids out of private school rather than pay the VAT fee increase?

These are purely selfish reasons as I want to move and think that house prices are going to go up a lot in areas with good state schools.

Thanks in advamce.

I know a few families who have managed to moved children not just in year 7.

You can rent in catchment and apply to a good state school - and when your child gets in you can move to a cheaper house. If it’s primary there is a sibling rule.

Oh yes, the hoards of people with £20k spare per child each year, yet choosing to live in areas with high deprivation, just for the kicks.

Well off people tend to live in nice areas already, so it isn't moving away from an awful school - it would be a hell of a lot of stamp duty for a small improvement in school. It's hyperbole, foot stamping but not realistic.

This.

I know a handful of families that have moved their kids, and without the continued expense of school fees, the cost of a house near an outstanding state school hasn’t been an issue.

They were doing this in the 1960s - nothing new under the sun

@LadyQuackBeth
It's not that straightforward. Decent areas don't necessarily have excellent state schools (arguably made worse by large numbers from those areas being sent to private schools). In addition to that, many areas do not have academically selective state schools. The only option for an academically selective school is often private. For families in those areas who want that type of school without paying private, they would have no choice but to move.

I hope they do but I doubt it will be very many. My kids state secondary is reducing down its PAN, as are other secondaries and primaries in the LA. State schools are needing more pupils all across the south.
I suspect most private school parents already live in nice areas so I doubt there will many moving, but if they do, hopefully my house will increase in value. Win win.
I do know 4 families in private schools and all are continuing there.
I work as a TA in state school and we haven’t noticed any reduction in Year 6s applying to private compared to previous years. We also haven’t had any move from private to state in my school.

The reality is the removal of the VAT exemption from private schools will only affect a tiny minority of the population and most people either just don’t care or agree with it. MN is not a real reflection of the general population.

Deleted.

It will vary across the country. In our area, there are not enough state school places. It's an ongoing problem. The nearest grammar has seen its catchment area shrink by a large amount. A local prep school saw lots more choosing the state grammar over private compared with previous years.

But lots of us aren't doing it because we can't afford the VAT. People in this thread are fixating on people that can't afford the VAT, but they are a small percentage of the people moving in my experience.

Me and several people I know whose kids started school last year looked at the way the wind was blowing and moved ahead of the election. For the people I know, the VAT is a small percentage of their income, it's just that the shift in policy has made us reconsider whether actually.we'd rather let the state pay for their education and give the child a £300kish housing deposit when they come out of uni.

If my child was already happy at private school I'd probably have just shrugged and left them there, but I don't think this is going to he the last attack on private schools so I thought we may as well avoid it.

Yes it definitely varies across country. A PP stated that there are outstanding schools in very town. Not in my town there isn't. Economically deprived area with two small private schools of approx 600 students each.

It's not always about living in an awful area.

We live in a lovely rural area, but anyone who can possibly afford it sends their children to private schools (I'm in a county with an exceptionally high proportion in private education) and the state options are all pretty dire.

We couldn't afford private, so put a huge amount of time and effort into securing an outstanding comp by sitting every music aptitude place going, and DD just commutes into London everyday.

For many of my friends, if they could no longer afford private fees they would be looking at a house move to an area with really good state option despite having lovely houses and lives here.

The reality is also that the removal of the VAT exemption will affect areas disproportionately. Unfortunately our area will be strongly affected - the better primary and secondary schools are heavily oversubscribed and this is not changing. Those who send to private live on neighbouring streets to the catchment of these excellent schools but just miss out so parents have paid for private in the past. The catchments are now shrinking. There are an abundance of private schools, some of which will sadly close in the next few years as numbers drop. The numbers of pupils sitting 11+ exams for the semi selectives soared last year and then rose again this year. Competition is exceptionally fierce

Unfortunately the extra students cannot be shipped to your area where they are needed to fill schools

With the increases over the past few years and the 20%, we won't be able to afford 2 through seniors.

We will rent to get the catchment and then will move if they get the school. We can afford to pay for rent and mortgage for a short time to get in to the school.

This is exactly how our friends have looked at it. They have 3 children, 2 had started at private school, but they’ve just moved, got them both into an excellent state school and will save the money they would have spent on fees, on extra curricular stuff, tuition etc and then give them a lump sum when they’re older.

I can understand their thinking on it. Our last child only has a couple of years to go at her private school so we never thought to change anything.

The money you pay for private school and VAT you will never see back.
House in a catchment of outstanding school is likely to grow in value as inequality in state education will grow dramatically thanks to Labour, so you're likely to get your investment back.

And as PPs say above, depends on cost of PS and number and age of kids.

Are private schools actually adding 20% onto existing fees? I understood that having to be VAT registered meant that they could recover a good amount of VAT on their costs and expenses. So I thought they'd reduce the base fee to account for that.

Ours has added vat, not the full 20% though.

People with more disposable income tend to live anyway in the nicer areas. So no it won't make any difference.

£20k ‘spare’ per child doesn’t do you any good if your child’s school closes. We’re 4 years away from secondary, if the prep closes (50/50) over the next few years or in the highly unlikely event Labour are looking at a second term then we are planning to leave London and buy near a good state school. I’d caveat that, by saying depending on what Labour do with state schools….which should be ‘interesting’.

@Neilsfavouritechilli

For those schools that waited until after the Budget to announce fee rises, many are adding the full 20%. Whilst they can reclaim input VAT, this is often minimal as the majority of costs are staff costs with no VAT element. In addition to the VAT, around half of schools have been hit with large business rate hikes. Now they have also been hit with NIC and living wage changes from April. For schools that announced their fee increases before the Budget, there will be large fee hikes in the pipeline to account for the NIC and living wage costs. This is on top of recent changes to the Teachers Pension Scheme.

Lots of people have been doing this for several years. The VAT will just cause far more people to do it. It will just mean that some state schools are private by stealth - as you need a £££££££ house to get in there.

The big beasts with huge new infrastructure investments, sure, but most independent schools aren’t like this. We really are going to see a lot of smaller schools close over this, they’ve been utterly clobbered with the education tax itself on parents, business rates, NIC and the post covid inflation/cost of living. Any one of those would finish off some schools but all 4 is going to dramatically shrink the sector, particularly the prep schools.

Many can afford the extra 20% but won't, for several reasons:

-They won't pay VAT on principle

-Universities sometimes prioritise state school entrants - eg 2 identical kids, one place and the state school kid will get it. Better for the uni stats.

There has been lots on the oxbridge threads over the years - they increased their state intake, but then realised that the state kids were the exact same "class" of kid as the private kids. ie state kids in expensive homes near lovely state schools who'd had access to any extra curricular or tutor they needed or wanted

My kids are adult, but if they were little and I had the money for private, I'd move to an excellent state area.

There are nice areas that aren’t in the catchment area of good schools though, plus if you’re not paying fees of £50k a year for two children then you have even more disposable cash for the property.
It already happens, it’s going to happen more,