Properties within easy reach of a local supermarket in the UK are, on average, some £21,512 higher than in nearby areas, new research has found.
Homes in areas with a Waitrose, Marks and Spencer, Sainsbury’s or Iceland are most likely to command a higher house price premium when compared to the wider town average, according to the study from Lloyds Bank.
And prices near upmarket supermarket brands can be particularly high, it also found. For example, the average price for properties within easy reach of a Waitrose is typically £36,480 higher than the wider town average at £429,118 versus £392,939.
Those living close to a Marks and Spencer have the second highest premium, with properties worth an average of £29,992 more than homes further away, followed by Sainsbury’s at £26,081 and even discount chains like Iceland at £22,767 command a strong premium.
Homes within easy reach of all four supermarket chains are trading at an average premium of 9%, the research also shows and locations close to budget supermarkets have seen biggest house price rises, with growth of 11% in three years.
House prices close to an Aldi, Lidl, Morrisons or Asda have grown by an average of 11%, or £21,400, since 2014. This is a faster increase than for all supermarkets and marginally higher than for all areas in England and Wales.
In postal districts with an Aldi, the average house price has grown from £178,809 in 2014 to £198,810 in 2017, an increase of £20,000. In addition, areas with a Lidl have seen average price grow of £23,722 from £216,258 to £239,981. However, in cash terms the largest price increases remain in postal districts with a Waitrose at £33,015 from £396,104 to £429,118, or 8%.
The average house price in an area with a Waitrose store is £429,118, the most expensive of all the chains and more than double compared to areas with an Aldi store at £198,810, which is the least expensive. The next most expensive are areas with a Marks and Spencer at £350,263 and Sainsbury’s at £314,154.
In eight out of 10 regions across England and Wales, properties command a premium price compared to other areas in the same town where there is a Waitrose. The greatest house price premium, in cash terms, that can be aligned to a supermarket presence is in the North West. Areas with a local Waitrose store in the region command an average price that is £80,272, some 38% more than the surrounding town.
‘With homes in areas close to major supermarkets commanding a premium of £22,000, the convenience of doing weekly shopping within easy reach may well be a pull for many homebuyers looking for good access to local amenities,’ said Andy Mason Lloyds Bank mortgages director.
He pointed out that the so called ‘Waitrose Effect’ is clear. ‘Having a premium brand on your doorstep means buyers typically need to pay top prices. But the research also shows that areas with budget stores have, on average, seen the most rapid house price growth in recent years,’ he explained.
‘There has been some suggestion that the likes of Lidl and Aldi are increasingly locating in more affluent areas where prices are already relatively high. Indeed, in 2014 house prices in areas with a Lidl were, on average, £4,700 lower than in neighbouring areas; today they are £6,400 higher,’ he added.
