How VAT on UK Private Schools is Impacting the Property Market

The UK government’s decision to add VAT to private school fees which came into play this month, framed as a move to reduce inequality, is sparking debate beyond education. Whilst it is too early to say what definitive impact this increase will make, early signs suggest it could have significant ripple effects on the British property market, says Katherine Watters, The Buying Solution’s Partner for the Southern Home Counties.

STOCK Group of schoolgirls (5-7) London, England.jpg low res

A Strain on Family Budgets

The imposition of VAT on private school fees adds up to 20% to already substantial costs, creating a financial pinch point for many middle-income families. For wealthier households – those insulated by substantial assets and high incomes – this change is unlikely to significantly alter their choices. The most prestigious private schools will likely retain their exclusivity, with little effort to moderate fees. On the contrary, these institutions may even double down on their elite status, becoming less accessible to a broader demographic.

However, for dual-income families balancing private school fees with rising mortgage costs and the higher cost of living, the VAT increase is proving to be a tipping point. Anecdotes from my region of Surrey and Sussex already indicate that families are considering pulling children out of private schools and transitioning to the state sector, or exploring international opportunities in order to afford the school fees for their choice of schools. I am aware of three local families who have recently accepted lucrative overseas job postings, driven directly by the financial impact of VAT on school fees. With their children already registered at top-tier institutions like Eton, relocating abroad has become their only viable option to fulfil their educational plans. Such stories underscore the financial gymnastics now required to maintain private education.

State Schools and Grammar Catchment Areas: Property Hotspots

The shift in demand toward state schools, particularly grammar schools, is already impacting the property market. As families reconsider private education, catchment areas for top-performing state schools are becoming increasingly competitive. There are currently 163 state-funded grammar schools across England with the largest number found in Kent (38), London (19), Lincolnshire (15), Buckinghamshire (13), Essex (eight) and Birmingham (eight). Proximity to a strong state or grammar school has always been a draw, but the new pressure from families exiting the private system is likely to intensify the scramble for homes in these coveted zones.

Conversely, areas around smaller private schools, which were previously buoyed by steady enrolment, could face cooling property prices. Many such schools are consolidating to survive – forming federations to pool resources and remain viable. While this consolidation secures the future of these schools, it signals potential declines in local property demand as families reconsider their educational priorities.

Implications for the State Sector

The migration from private to state schools may also have unintended consequences for the state education system, which is already under pressure. Increased demand for places in top-performing schools will push local councils to expand capacity, potentially altering the dynamics of residential areas. Overcrowding and stretched resources could create a new set of challenges, driving further polarisation within the education system. Simultaneously, the influx of higher-income families into the state system may fuel rising house prices in well-regarded school districts.

Mortgage Pressures and Downsizing Decisions

The broader economic context – high interest rates and mortgage costs – is exacerbating the strain. Families who leveraged historically low interest rates to trade up the property ladder are now grappling with significantly higher monthly repayments. This shift is reducing disposable income previously allocated to private school fees, luxury purchases, or travel.

As a result, some homeowners are quietly putting their properties on the market which presents opportunities for buyers. Downsizing is emerging as a strategic move, freeing up equity to cover school fees or reduce mortgage payments. This trend is evident in commuter belts like Surrey and Sussex, where large family homes are appearing in private sales. Such moves illustrate a recalibration of priorities, with families opting to downsize their homes to preserve educational aspirations.

A Mixed Market Outlook

In the broader property market, the VAT policy is contributing to a landscape that is already complex. The post-COVID property boom, characterised by inflated prices and fierce competition, is normalising. Some regions, particularly in the super-prime market, are seeing more realistic valuations and renewed activity. However, stock remains limited, and affordability continues to dominate decision-making for many.

For agents operating in commuter towns and popular rural locations, the mood is cautiously optimistic. Valuations and transactions are picking up, and spring 2025 is expected to bring more movement as vendors and buyers adapt to the new normal. Catchment areas for strong state schools and accessible rural hotspots, such as the Surrey Hills and the South Downs, are likely to remain resilient.

How The Buying Solution Can Help

As with many fiscal policies, the effects of VAT on private schools will fully reveal themselves over time – and possibly the law of unintended consequences – rippling through education, property and lifestyle choices. For families, schools and property markets alike, adaptation will be key in navigating this period of transformation. Our specialist buying agents, together with our network of leading education consultants, can offer highly personalised advice on everything from catchment areas and desirable locations to ensuring you make a sustainable investment, helping you to make confident and well-informed decisions for you and your family.

Katherine Watters, The Buying Solution Partner, Southern Home Counties

Katherine Watters is our specialist Partner for the Southern Home Counties

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The Rise of Wellness in Real Estate

Wellness now shapes the way we choose to live and where we call home, says Toto Lambert, The Buying Solution’s specialist Partner in London – and also a yoga teacher and qualified nutritional therapist. Here, she discusses emerging trends and how our expert buying agents can secure exceptional properties designed to elevate the wellbeing of our clients.

Woman in ice bath wearing grey WHOOP health tracker on wrist.
Image: WHOOP

Wellness is big business and the UK is leading the way in Europe, with the industry in this country estimated to be worth over US $223 billion. Evolving into more than just a personal pursuit, wellness has become a defining factor in how we live and where we choose to call home. At the forefront of this movement is the growing demand for properties that support and enhance our sense of wellbeing, reflecting both environmental and technological trends.

For those navigating the complex and competitive property market in London and the Southern Counties, the expertise of a specialist buying agency is invaluable in sourcing homes that cater to these shifting priorities.

The Rise of Wellness Technology in Homes

Wellness tech, from AI-powered wearables to sleep-optimisation devices, has seen a meteoric rise. Tools like WHOOP health monitors, Oura Rings, and devices designed for nervous system regulation are no longer niche accessories; they’ve become lifestyle staples for many.

How we set up our homes to accommodate wellness tech and AI is becoming ever more important. The implication for properties is clear; spaces need to adapt. Homes with integrated smart systems or the potential to incorporate such technologies are in high demand. Whether it’s a bedroom designed for smart sleep tracking or room layouts that allow for unobtrusive tech integration, the modern home is becoming a wellness hub.

Creating a Sanctuary: Environmental Wellness

In tandem with technological trends, there’s a growing emphasis on environmental wellness ­– both within the home and its surrounding environment.

Internally, clients are seeking homes that allow for serene, restorative spaces. Zen dens – tranquil zones designed for digital detox – are replacing the traditional man cave, reflecting a shift towards relaxation and recovery over recreation. Reformer rooms for Pilates or spaces dedicated to Nordic wellness practices like infrared saunas and ice baths are becoming coveted features.

Externally, proximity to green spaces remains a top priority; a demand accelerated by the pandemic that shows no sign of slowing down. Areas such as Hampstead with its famous outdoor swimming ponds on the Heath, Richmond with its 10-acre Ham Lake outdoor pool within a large nature reserve, and neighbouring areas to Hyde Park which houses the Serpentine Lido, are all excellent choices for wellness-oriented buyers.

Wellness by Design: Natural Light, Quiet Spaces and Soundproofing

The design of the property itself plays a crucial role in supporting wellness. A wealth of natural light – essential for mental health and vitality – is a non-negotiable for many buyers. Soundproofed interiors and bedrooms positioned in quieter areas of the home are also in high demand, reflecting a desire to minimise stress and maximise rest. More intimate spaces dedicated to calming pursuits are being carved out; with the likes of flower rooms, listening rooms, even star-gazing rooms growing in popularity. Our extensive network of leading architects and interior designers is uniquely equipped to expertly craft these highly sought-after spaces in any new home.

Freehold homes offer greater flexibility to add bespoke features such as smart saunas, reformer rooms, or dedicated relaxation areas. I have even seen hyperbaric oxygen chambers – favoured by athletes for recovery – installed in private homes. Apartments, meanwhile, are not exempt; balconies are increasingly being adapted for wellness, housing everything from compact ice baths to zen-inspired switch-off areas.

Deer in Richmond Park at sunrise
Image: Unsplash
Location Matters: A Slower Pace and Better Air Quality

Geographical considerations are just as critical. Beyond green spaces, buyers are looking for areas with better air quality, less noise pollution and a village-like feel. Outer London regions such as Richmond (pictured), Wimbledon and Dulwich offer a slower pace of life while retaining easy access to the city’s amenities, and we are expertly-placed to advise on property in these areas.

This trend aligns with a broader desire for wellness on a community scale, with buyers valuing proximity to yoga studios, community saunas and outdoor swimming facilities where they can benefit from a personal connection with others.

How a Buying Agency Adds Value

Navigating the complexities of sourcing a property that supports a holistic approach to wellness requires extensive market expertise and a highly tailored approach. Our specialist buying agents at The Buying Solution have an intimate understanding of both client needs and market dynamics, making us best placed to identify properties that meet exacting wellness criteria.

By understanding the nuances of these trends, we not only save clients precious time but also provide a highly competitive edge in securing properties that might otherwise be overlooked.

Toto Lambert, The Buying Solution Partner, London

Toto Lambert is our specialist Partner in London


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