How VAT on school fees is hitting the property market - the example of Reading

Dominic Agace, Chief Executive of Winkworth, with more than 100 offices nationwide, including over 60 across the capital, revealed the impact of the tax change in the latest episode of the Property Exchange podcast. He said: “Since VAT was imposed on school fees, the mid-market home has never been more popular as people move to less expensive areas to afford the fees or decide to move within the catchment area of good state schools. Our offices are reporting enormous interest and are seeing sealed bids. The larger, more expensive houses are not attracting the buyers, as they once did.

“We are also seeing people are moving abroad to work to places where they pay less tax to offset the tax increases on school fees they have already committed to for their children.”

Melanie Sanderson, Managing Editor, The Good Schools Guide urges parents to do their homework when considering a move to a new area to be close to good state schools.

She told the podcast: “Parents are finding ways to make it work but what the next generation of young parents coming through the system will do is when we will really feel the impact.

“Our advice is you really need to do your homework. Take Berkshire, there are six local authorities so lots of research is needed. In the urban part of Reading, you do have to live exceptionally close to schools to get your first choice. At the Oxford Road Community school in Reading, which takes 30 children every year, the last place went to a child who lived 0.2 miles away. If you move to an area such as Sonning, the last child offered a place at Sonning Primary school lived 1.39 miles away. There are also two exceptional grammar schools, Kendrick and Reading School for Boys. However, it's really important to remember that those are exceptionally difficult to get into. The means of entry is that the child sits a test when they're in year six, and places are offered in rank order of achievement in that test, but also you have to live in priority areas. So again, to parents, make sure that you really understand what the admissions criteria are here, because if you get one of those two wrong, your child is going to stand far less of a chance of getting in.”

Michael Foldvari, of Winkworth’s Reading office, said: “Reading is still far more affordable than London, and most of the towns and cities in between Reading and the capital. For example, in a suburb of Reading such as Caversham, close to one of those top schools, you could buy a four-bedroom detached house for as little as £600,000.

“Caversham and Sonning are among the most desirable parts of Reading. There are three primary schools in Caversham, and they all sit in the top 10 in league table rankings.

“Prices in Sonning have been pushed up because of the George Clooney effect, who lives there. An average four-bedroom house in Sonning now is going to cost you around £1m. We are seeing more people than ever move from London, particularly now people are having to go back to the office. Reading is a good option, offering great value, a fast commute and good schools.”