Rental of foreign reg planes is legal in the UK, but the DfT restrictions (i.e. ANO Article 140 & others) make it impossible to set up a school around such planes.
However, if I recall correctly, a well known aviation journalist wrote on the flyer.co.uk forum (last year I think) that he got a letter from the DfT stating that EASA-reg planes are exempt from Art 140. This is suprising because 140 is very clear, but not suprising because EU law overrides a lot of UK law...
I suspect that a school wouldn't bother to operate say a D-reg because while I gather there are some benefits on maintenance, they will be marginal at best. N-reg would be more like it but that's clearly impossible.