The idea of the “Waitrose effect” on the local property market has been highlighted yet again, with new research showing it could add over £36,000 to the value of a home.
Lloyds Bank’s annual survey found that homes within easy reach of a local grocery retailer command a premium of £21,512 on average compared with property prices in nearby areas.
The same survey found that homes near a Waitrose commanded the biggest premium once again — adding £36,480 more to property values compared to average house prices in the wider town.
Meanwhile, properties close to a Marks & Spencer have the second highest premium, with properties worth an average of £29,992 more than homes further away.
Those close to Sainsbury’s commanded an average of £26,081 more, while Iceland and Tesco rounded out the top five with average premiums of £22,767 and £21,344 respectively.
However, sitting at the bottom of the top 10 is Aldi, which Lloyds Bank’s research found were bringing nearby property prices down by an average of £2902.
The data compiled average house prices in postal districts with a supermarket from a national chain with typical property values in the wider towns to calculate the price premium paid for homes located near supermarkets.
“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 home buyers looking for good access to local amenities,” Lloyds Bank mortgages director Andy Mason said.
“The ‘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.
“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, £4700 lower than in neighbouring areas; today they are £6,400 higher.”
Average property value premium for living near a supermarket:
- Waitrose: £36,480
- Marks & Spencer: £29,992
- Sainsbury’s: £26,081
- Iceland: £22,767
- Tesco: £21,344
- Co-Op: £20,687
- Morrisons: £10,504
- Lidl: £6416
- Asda: £4117
- Aldi: –£2902