Research reveals the Waitrose effect on UK house prices
Living near a supermarket in the UK adds an average premium to the price of a home of £21,500, but it does depend on which brand, new research has found.
It is Waitrose and Marks & Spencer that attract the biggest premium but the budget supermarkets are also helping to raise prices, according to the analysis from Lloyds Bank.
But overall, homes in areas with a Waitrose, Marks & Spencer or Sainsbury’s are most likely to command a higher house price premium when compared to the wider town average.
On average homes near a Waitrose command the biggest premium with homes costing an average of £43,571 or 12% more than average house prices in the wider town where the brand is located.
Next is Marks & Spencer with a premium of £40,135 and Sainsbury’s at £32,707 while homes within easy reach of all three supermarket chains are trading at an average premium of 12%.
In the past year the premium attached to living within walking distance to a Marks & Spencer has grown by £10,143 from £29,992 to £40,135, the largest rise amongst the supermarkets chains. By comparison, the price premium near a Waitrose has grown by a relatively modest £7,000 in the past year.
Homes close to a Tesco, the UK’s largest supermarket, are also worth £21,369 more than other properties in the nearby area, closely followed by the Co-Op at £21,020 and Iceland at £17,445.
Smaller local stores like a Little Waitrose, Sainsbury’s Local or Tesco Extra attract a higher average premium of £58,109 compared with a larger superstore at 11%, or £30,580.
But it’s homes near to budget supermarkets which were found to have seen the biggest house price rise. Properties near to Lidl, Aldi, Morrisons and Asda have increased 15% or £29,316 over the past four years, a faster increase than for all supermarkets at 10%.
The research report says that this shows that houses near discount stores can also be popular and the cheaper supermarkets are catching up fast. Over the past four years average house prices in localities with an Aldi grew by 20%, from £178,809 to £213,765, a much faster increase then then the rest of the town at 16%, from £182,395 to £211,463.
Other areas with a supermarket chain to record the fastest price growth in the past four years include those with a Co-Op, up 16% from £224,679 to £259,969, and Morrisons up 14% from £203,756 to £233,261.Homes near a Lidl are also worth £5,411 more than other properties in the nearby area.
‘It’s easy to assume the effect of different factors on the value of a property but this research clearly shows that there is a significant link between the convenience of a local supermarket and house prices,’ said Andy Mason, Lloyds Bank mortgages director.
‘The Waitrose factor has been known for some time and although the likes of Aldi can’t yet boost house prices in quite the same way, the research shows that all stores are now having a positive effect on local property prices,’ he added.
The research also shows that the average house price of properties close to a Waitrose store is £420,112, the highest amongst the national supermarket chains and almost double the value compared to locations with an Aldi at £213,765, the lowest.
After Waitrose the next most expensive locations are with a Marks & Spencer at £343,797) and Sainsbury’s at £320,510.