It is a truth universally acknowledged that a house located near a supermarket must be in want of a higher price. But which shop bags you the biggest boost to your home’s value?
The Waitrose Effect is a well-established phenomenon in the UK housing market, with homes located near branches of Waitrose getting a boost to their house price.
On average, living close to any well-known supermarket chain can add an average of £22,000 to the value of your home. But new research from Lloyds Bank reveals that different supermarket chains have different effects upon your property’s worth. Which grocery brand bags you the biggest boost?
Waitrose, unsurprisingly, leads the way, with properties close to a store receiving an average boost of £38,666 (or 10 per cent) higher than the wider town in which they are located (£425,428 v. £386,763).
Properties near a Sainsbury’s, Marks and Spencer, Tesco or Iceland also command higher house price premiums – Sainsbury’s (£27,939), Marks and Spencer (£27,182), Tesco (£22,072) and Iceland (£20,034).
The lowest house price premiums, on the other hand, are in areas with an Asda (£5,026), Lidl (£3,926) or Aldi store (£1,333).
Mike Songer, Lloyds Bank Mortgage Director, comments: “Our findings back-up the so-called ‘Waitrose effect’. There is definitely a correlation between the price of your home and whether it’s close to a major supermarket or not. Our figures show that the amount added to the value of your home can be even greater if located next to a brand which is perceived as upmarket. Of course, there are many other drivers of house prices beyond having a supermarket on your doorstep, but our research suggests that it is a strong factor.”
The Waitrose Effect is true in seven out of the 10 regions of England and Wales. It is felt most strongly in the North West, where the average house price in an area with a Waitrose is £73,629 (39 per cent) higher than in the surrounding areas (£263,687 v. £190,058).
It is also possilbe to receive a boost from multiple stores being located nearby. At a local level, Chiswick in West London commands the largest average house price premium when compared with the surrounding area, at £476,738. The average house price in Chiswick, which offers residents a Waitrose, Sainsbury’s and Marks and Spencer, is £961,564 – almost double the average for Hounslow (£484,826). Golder’s Green, which has a Sainsbury’s and Marks and Spencer, has the next largest premium in cash terms (£423,180), followed by Belsize Park/Hampstead (£313,166).
Outside of southern England, the largest average price premium is in the Cheshire town of Wilmslow where shoppers are catered for by supermarkets including Waitrose, Sainsbury’s, Marks and Spencer, Tesco and Lidl. Buyers can, on average, expect to pay a price premium of £277,028 for a home in Wilmslow. In the Ponteland area of Newcastle, the average premium is £206,401; the NE20 postal district has a Waitrose, Sainsbury’s and a Co-op store.
The data also shows that there are several locations with a discount supermarket store where average house prices trade at a premium.
For example, the CH60 postcode area of Heswall has both an Aldi and an Iceland store and the average house price is £118,000 higher than in the overall Wirral area. Similarly, in Harbourne, which also has an Iceland store, homes cost on average £101,599 more than in the whole of Birmingham. The average price of houses close to a Lidl store in West Ealing is £650,702, compared to £542,724 in the wider Ealing area; a premium of £107,978.Google+