Relentless competition for schooling turns into rental bunfight!
According to new research by Countrywide plc, those buying a home have long paid a premium to live within the catchment area of a good school. But now, intense competition for school places is filtering into the rental market.
Countrywide’s latest Quarterly Lettings Index shows that so far in 2015, 28% of properties rented across the UK within a kilometre of an OFSTED outstanding school were made to families, up from under 10% in 2008. The figure is even higher for outstanding secondary schools with a third of properties rented going to families with children.
The figures are particularly pronounced in London where for the first time in 2015, over half of properties rented were to families in the kilometre surrounding an outstanding school. While this is a product of the significant increase in competition for school places, the growing number of families living in the private rented sector means more of them move both for work and their children’s education. While the figures in London are most marked for schools rated outstanding, the pressure on school places in the Capital means there has been uplift in families with children renting in the area surrounding most schools.
Given it is the address from which the school application is made in January that the application is assessed against, the summer months are when most families think about moving. Over half of families with children in the private rented sector move during June, July, August or September in time for the forthcoming academic year. Households with children moving into the area close to an outstanding school don’t move far, an average of just half a mile. This confirms the fine margins involved getting into school catchment areas. This distance is considerably shorter than the three miles the average households in the private rented sector moves.
As with house prices, tenants pay a premium to live close to a high performing school. Given tenants move more often than homeowners, this premium tends to be smaller. In 2015 the average tenant living within a kilometre of a school rated outstanding paid 14% more than someone living more than a kilometre away. While the premium attached to one and two bedroom flats is almost negligible, tenants living in three or four bedroom houses pay an average of 16% more. Where catchment areas are particularly tightly defined, a house on one side of the road can be let for 15-20% more than an identical house on the other side.
David Fell, Research Analyst, Countrywide plc said: “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. 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.
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. 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.
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.”