You may have heard of “the Waitrose Effect” i.e. the impact that living close to a premium brand supermarket can have on house prices in the area. While this might seem like a minimal factor compared to others such as crime rates or local schools, the reality is that your home could be worth up to £36,000 more if it’s got the right supermarket on the doorstep.
The supermarket house price premium
Research from Lloyds Bank has put a monetary value on the house price premium that is enjoyed by those who live close to a supermarket. On average, house prices are £21,512 higher if located close to a supermarket – any supermarket. This is attributed to the increased convenience of being able to do the weekly shop without the need to drive or travel any distance.
Not all supermarkets are created equal
As you might expect, the type of supermarket in your area delivers a different degree of premium. Having any supermarket on the doorstep will boost house prices by around 9% but the Lloyds research identified the following average house price premiums by proximity to the biggest supermarket brands:
Marks & Spencer, £29,992
So, homes close to Waitrose remain the best off. The Lloyds research found that the average value of a home in the vicinity of a Waitrose was £36,480 higher than the wider town average (£429,118 versus £392,939).
Cash prices vs. percentage growth
It’s worth noting that many Waitrose and Marks & Spencer stores tend to be positioned in areas where property values are already quite high so are more likely to win when it comes to the cash value of the premium. However, the most significant growth in house prices as a result of the Waitrose Effect is actually taking place for those properties that are situated in locations close to lower end supermarkets. For example, the rise in house prices in areas close to Aldi, Lidl, Asda and Morrisons is 11%, which is a larger price increase than that for areas with other supermarkets (9%). So, the average house price in an area where there is an Aldi store has risen from £178,809 in 2014 to £198,810 in 2017 – an increase of just over £20,000 in three years. Over the same period, homes within the vicinity of a Lidl experienced an increase of £23,722, up from £216,258 to £239,981.
Where in the UK can you benefit the most?
The Lloyds Bank research identified the locations with the most significant ‘area to town house price premium’ as Ponteland in Northumberland and Chiswick in West London. Homes that are positioned close to a Waitrose, Sainsbury's and Co-Op in Ponteland are on average 104% higher in value than those in the surrounding area. Homes in Chiswick close to Waitrose, Sainsbury’s and Marks & Spencer achieve a value that is 89% higher.
There is plenty of research to suggest that having a supermarket nearby is one of the most important local amenities for many buyers – and the figures from Lloyds seem to support this. It’s another factor to bear in mind when looking at your own property value – or the best place to buy a new home.