With competition for places in the most popular schools increasing, new research from Nationwide Building Society shows that nearly a quarter (23 per cent) of UK parents of children aged 5 to 16 years would move and be prepared to pay between two and 10 per cent extra on the price of their new home to be in the catchment area of a better school.
Nearly one in ten (eight per cent) would be prepared to pay more than 10 per cent extra for their house and eight per cent would pay anywhere up to an additional two per cent.
With the typical UK home currently worth £172,1272, this could lead to a substantial monetary outlay for parents at a time when household finances are already being squeezed. For example, parents willing to pay two per cent more would need to find nearly £3,500 extra. Anyone prepared to pay 10 per cent more would add an additional £17,213 to the cost of their new home.
The additional cost of the house will also have implications on the cost of the mortgage. Paying an additional 10 per cent on the cost of a typical UK home (£172,1272) would mean buying a house worth £189,340.
Based on a 15 per cent deposit, a house worth an additional 10 per cent would require an extra £2,582 deposit and, if for example, Nationwide’s five-year Flexclusive tracker mortgage was taken out, would also mean an extra £76.75 per month in mortgage repayments. So, in the course of the first year, parents would need to find an additional £3,503 and, over a five-year period, it would cost £7,187 extra.
Parents are already making house purchase choices based on schools. Our research shows that nearly one in five of parents (18 per cent) admit that a school league table or school Ofsted rating has influenced where they chose to live.
Richard Napier, Nationwide’s divisional director for savings and mortgages, comments: “Choosing the right school for your child is possibly one of the most important decisions a parent will make and it appears league tables and Ofsted reports play a significant part in that decision.
“Competition for places at the UK’s best schools continues to increase and, although household finances remain stretched, it is significant that a number of parents are willing to pay more on the price of a new home to ensure their child goes to a good school.
“Taking the cost of a typical UK home, any parent willing to pay 10 per cent more would need to find an additional £17,000 on the total cost of the house, which is a lot of money in the current climate. And, this is before you factor in the cost of items such as uniform, P.E. kit, lunch and even travel to and from school.
“And with the additional monthly repayment on Nationwide’s five-year Flexclusive tracker mortgage being an additional £76.75, it may well be a premium parents think is worth paying.”
Have your say on this story using the comment section below.