Competition for school places affecting rental market
School is about to be out for summer and as teachers contemplate how best to spend their next six weeks of freedom, the search for property in the catchment area of a good school has been intensifying for some time.
New research by Countrywide plc indicates that those purchasing a home near a good school or college have long paid a premium in order to live there. The firm now believes that this competition is spreading to the rental market.
Working out
Like all good academics, Countrywide has shown its working out in its latest Quarterly Lettings Index. Data from the report shows that in 2015 to date, 28% of properties rented in the UK within a kilometre of an OFSTED outstanding school were made to families. This was up significantly from just under 10% in 2008.[1]
For catchment areas of outstanding secondary schools, this figure was even higher, with a third of properties rented out to families with children.
In the capital, the figures were substantially higher. During the first period of the year, over 50% of properties rented within a kilometre of an outstanding school were to families. While the figures are marked surrounding schools rated as outstanding, overall pressure for academic places in London has seen a number of families with children renting in areas surrounding most schools. What’s more, the growing numbers of families priced out of owning a home means many of them move into rental accommodation in order for both work and children’s education.[1]
Summer swap
As on the start line at Sports Day, the summer months are commonly when families start to limber up for a move. This is largely due to the fact that when a school application is made in January, it is the address from where the application is made that will be assessed. Countrywide’s textbook states that more than half of families with children in the private rented sector move during June, July, August or September. Households with children moving into the area close to an outstanding school were found to move just half a mile on average.
Tenants also pay premiums in order to move closer to a high-performing school. In 2015 to date, the average tenant living within a kilometre of an outstanding school paid 14% more than other families living more than a kilometre away. In addition, tenants living in three or four-bedroom homes pay an average of 16% more to live in these regions.[1]
Competition for school places affecting rental market
Flexibility
‘There are 1.6 million families with children living in the private rented sector, 20 per cent more than last year, which means school catchment areas are becoming increasingly relevant to the rental market,’ noted David Fell, Research Analyst at Countrywide plc. ‘Many of these families are choosing to rent close to the school gates and in some cases parents are taking advantage of the flexibility of renting to move from the fringes of their preferred school’s catchment area to ensure their child’s entry.’[1]
Fell believes that, ‘the flexibility of renting can present a challenge for schools, where competition for their places is high, particularly as some less scrupulous owners have in the past rented homes to try to secure a place in a school.’ He warns that, ‘schools are becoming increasingly savvy now, ensuring the home is a family’s permanent residence rather than somewhere which has been rented for a few months during the application process.’[1]
‘The growth of families with children renting is just one of the changes the sector will see as the number of renters in all different stages of life continues to grow. Adapting to provide for these changing needs is a big challenge for the sector,’ Fell concluded.[1]
[1] http://www.propertyreporter.co.uk/landlords/relentless-competition-for-school-places-feeds-through-to-rental-market.html