House price gain if you live close to a premium supermarket

Posted 28 July 2016 by Ben Salisbury

If you live in an area close to a premium supermarket you could see an average of almost £40,000 added to the value of your house, according to Lloyds Bank

Living close to a supermarket can add an average of £22,000 to the value of your home, according to new research from Lloyds Bank.

If you live near a Waitrose supermarket, the price boost jumps to an average of nearly £40,000.

The research found that the 'Waitrose effect' pushes up the value of property close to a Waitrose store by an average of £38,666, equivalent to 10%, higher than the wider town in which the properties and store are located, up from £386,763 to £425,428.

Mike Songer, Lloyds Bank mortgage director, said: "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.”

The biggest impact on property prices is seen in the north-west of England where the average house price in an area with a Waitrose is £73,629 or 39% higher than in the surrounding area, up to £263,687 from £190,058.

Waitrose gives the highest price premium to properties of all the national supermarkets, followed by average increases of £27,939 for Sainsbury’s, £27,182 for Marks and Spencer, £22,072 for Tesco and £20,034 for Iceland.

After the north-west of England, other regions where the “Waitrose effect” is particularly strong include the west midlands with a £57,539 premium, Yorkshire and the Humber at £36,376 and the south-east, £31,681.

The research also details how in an area that already has high prices, if three of the premium supermarkets are in that area, the price uplift can be astronomical.

For instance, Chiswick in West London has a house price premium of £476,738. The West London district which offers residents a Waitrose, Sainsbury’s and a Marks and Spencer has an average house price of £961,564, almost double the average of neighbouring areas, Hounslow, where average property prices are £484,826.

Golders Green, which has a Sainsbury’s and a Marks and Spencer has the next largest price premium of £423,180, followed by Belsize Park and Hampstead with £313,166.

Outside of southern England, Wilmslow in Cheshire, which offers a Waitrose, Sainsbury's, Marks and Spencer, Tesco and Lidl, has the largest average price premium. Buyers can expect to pay £277,028 more for a home in Wilmslow. In the Ponteland, N20 area of Newcastle, which has a Waitrose, Sainsbury’s and a Co-op, the uplift is £206,401.

“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,” added Songer.

The lowest house price premiums for supermarkets are for properties close to an Aldi store, where prices are lifted by a modest £1,333, below Lidl at £3,926 and Asda, £5,026.

The research found that some locations with a discount store also benefit from an increase in average house prices. 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.

In Harbourne, which also has an Iceland store, homes cost on average £101,599 more than in the whole of Birmingham and homes close to a Lidl store in West Ealing average £650,702, compared to £542,724 in the wider Ealing area; a premium of £107,978.

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