The UK’s independent and special educational needs and disabilities (SEND) school sectors are undergoing significant changes in 2025, driven by new government policies and evolving market dynamics.

According to Christie & Co’s newly-released Childcare & Education: Market Review 2025, from January 2025, the introduction of VAT on private school fees has created uncertainty across the independent school market.

A recent High Court ruling upheld the Government’s decision, prompting schools to reassess financial models and trading strategies.

Rising operational costs – including increased pension contributions, energy bills, and National Insurance contributions – have further strained profitability, leading to a wave of school closures and consolidations.

Despite these challenges, the report found that schools that have pro-actively adapted through fee subsidies, site consolidation, and enhanced marketing remain attractive to buyers.

Sales activity has focused on smaller schools, with strong interest from SEND providers repurposing sites for specialist education.

Meanwhile, the SEND sector continues to show resilience and growth and demand remains high, supported by political focus and investor appetite.

The Children’s Wellbeing and Schools Bill and anticipated reforms to the SEND funding framework are expected to shape future operations, and while government investment aims to expand SEND provision in mainstream schools, private sector involvement remains critical, particularly for high-needs services.

We anticipate that as the second half of 2025 unfolds more vacant schools are likely to come to the market and, from a trading perspective, all eyes will be on pupil numbers, trading performance, and emerging opportunities across both independent and SEND education landscapes

According to Christie Finance, the lending appetite for the UK childcare and education sector remains strong, underpinned by favourable economic conditions, stable interest rates, and supportive government policies.

The broker also noted that lenders are showing a growing interest in supporting businesses that contribute positively to society.

Commenting on the independent school market, Richard Green, director and lead valuer at Christie & Co, said, “We anticipate that as the second half of 2025 unfolds more vacant schools are likely to come to the market and, from a trading perspective, all eyes will be on pupil numbers, trading performance, and emerging opportunities across both independent and SEND education landscapes.”

Commenting on the SEND school market, Hannah Haines, head of healthcare consultancy, added: “Despite political scrutiny, we expect the sector to continue to grow, with significant appetite for vacant properties to be repurposed into SEND schools, including former hotels, care homes, nurseries, and independent schools.

“With construction costs stabilising and base rate reducing, development activity may become more prevalent.”