Ruth Kelly’s most recent announcements about improving parental choice have a larger impact on the UK’s real estate market. The basics are that to improve choice schools will be encouraged to work together in selecting students. The proposed Fair Banding system would see all students sitting an IQ test with groups of local schools then taking a fair share of students from all ability ranges, rather than just those who live locally. To try and ensure this works the government has also proposed a new School Transport Bill that should help children from poorer families get to school and the creation of Choice Advisors to help families get their children into the schools they want.
Individually none of these changes seems too dramatic, but when viewed in aggregate they add up to a none too subtle attack on the free action of the real estate market. Education activists have long complained that middle class parents paying a premium for homes in the catchments of good schools have effectively priced poor families out of schools in these areas.
A study in 2003 by the London School of Economics showed that houses near good schools command premiums of up to 33%, although it also found no real price differences for houses in catchment areas for average schools compared to those with the poorest performance. When the LSE repeated the study in 2004, the price premium for houses near top schools had grown to an average of £42K – the equivalent of paying for several years of private education. Trying to improve education and social mobility are excellent ideas, but if these changes are actually implemented, the government’s blinkered vision of choice may damage the real estate market and drive more parents to private education.
