What’s happening in the independent and SEND schools markets in 2025?

Following the launch of our ‘Childcare & Education Market Review 2025’ report, Richard Green (Director – Valuation Services, Christie & Co) and Hannah Haines (Head of Healthcare Consultancy, Christie & Co) summarise what’s been happening in the independent schools and SEND schools markets so far this year.

AN OVERVIEW OF THE INDEPENDENT SCHOOLS MARKET

By Richard Green, Director – Valuation Services, Christie & Co

Between August 2024 and September 2025, 43 schools either closed or announced closure resulting in a loss of no less than 9,245 places.

Due to the introduction of VAT on school fees, effective January 2025, sales regarding trading schools in the market have been somewhat subdued as operators acclimatise themselves to the new trading profiles of their businesses. Until more certainty around pupil numbers and trade is established, we expect purchasers in the market to adopt a cautious approach.

With the High Court having now ruled on the legal challenge to the Government’s decision to impose VAT on private school fees in the UK, the long-awaited verdict has provided some clarity. The challenge, brought by various groups including parents, independent schools, and faith schools, argued that the policy is discriminatory and violates human rights. However, the Court upheld the Government’s position, allowing the policy to proceed. While the ruling settles the legal question, uncertainty remains across the sector as schools continue to assess the financial and operational impact of the forthcoming changes.

The independent school sector is also facing other financial pressures in the form of rising teacher pension contributions, rises in energy and utility bills, and the recently introduced changes to employer National Insurance contributions, all of which ultimately result in lower levels of profitability or, in some cases, losses being incurred. Operators in the market, therefore, have some visibility of how these rising costs will affect their financial modelling and, where losses are expected, they have no choice but to make difficult decisions as to whether they continue to trade, merge, or close. This is evidenced by the statistics on this page, where numerous closures were announced towards the end of the last academic year (2024/25).

Parent expectations have also shifted in recent years, a trend exacerbated by the VAT introduction. Independent school operators have responded by subsidising fees where possible, and consolidating primary, junior, and nursery provisions onto the same site as senior schools. This not only reduces operational costs but also appeals to parents by simplifying logistics. Schools have also enhanced their marketing strategies, highlighting the unique benefits and facilities of private education.

Sales activity in the market has typically involved smaller, closed schools with fewer than 300 pupils. The market remains strong from SEND providers who are still well-placed to acquire trading schools, which are less affected by the changes in VAT. In our experience, the majority of demand is from SEND corporate operators looking to acquire closed independent schools with a view to repurposing them into special education needs settings. In our opinion, H2 2025 will be a crucial time for operators to gauge how changes in pupil numbers will affect trade moving forward. There will be a greater focus on accounts and trading performance, coupled with budgets for the September 2025/26 year and 2026/27. No doubt, the market will be poised to see what unfolds in terms of trading performance and what opportunities are likely to present themselves.

AN OVERVIEW OF THE SEND SCHOOLS MARKET

By Hannah Haines, Head of Healthcare Consultancy, Christie & Co               

In the first half of 2025, we saw continued transactional momentum in the SEND sector, with operators expanding and an increased investor appetite. This is despite political scrutiny and is driven by sustained demand for services. Operators remain resilient and are navigating challenges by focusing reinvestment strategies on aiding and facilitating the best possible outcomes for the children and young people they serve.

Members of the House of Lords began their detailed examination of the Children’s Wellbeing and Schools Bill in the committee stage on 20 May. The Bill introduces a wide variety of measures, ranging from school reform and home education to safeguarding, and is expected to shape future policy and operational frameworks across the sector. Further to this, there is ongoing pressure for the Department for Education to deliver on its promised framework to improve decision-making and funding sustainability in the SEND system. With a funding deficit of circa £3.3 billion in high-needs budgets for local authorities, and the Safety Valve programme set to cease in March 2026, these urgent reforms are required to guarantee that children and young people with SEND receive the education and support they are entitled to.

We eagerly await the Department for Education’s white paper on SEND, promised Autumn 2025. For this, we anticipate that any reform will have a limited impact on high need service commissioning, as the public sector continues to outsource to the private sector. On the other hand, the Government has promised £740 million capital investment to create more SEND places in mainstream schools. This is most likely to impact lower-need places where needs can be met to promote neurodiversity inclusion; however, it will face challenges relating to staff resources and training, delays in diagnosis, and potentially overcrowding in classrooms.

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. Furthermore, with construction costs stabilising and base rate reducing, development activity may become more prevalent with both public and private examples for new school development, such as the 56-pupil academy in Warrington on a council-owned site that is due to be operated by The Sovereign Trust.

Going concern transactions remain in high demand, low supply, and with competitive pricing as groups continue to expand their portfolios. Specialist education provider, Outcomes First Group, was particularly active in H1, having entered the mainstream market through the acquisition of Blenheim Schools - five schools, including one in Riyadh – and the acquisition of Oxford Montessori Schools.

To find out more about the independent and SEND schools markets, read our ‘Childcare & Education Market Review 2025’ report here.