The Waitrose Effect Could Boost House Prices By Thousands

What has become known as the “Waitrose effect” has seen some houses increase their value by as much as £36,000. The idea of having a premium brand supermarket on your doorstep allows house prices to rise as buyers pay for the convince of having the shop on their doorstep. Living near a traditional supermarket can increase a home’s value by as much as £22,000, research suggests.

Lloyds Bank has found that many homes that are within easy reach for a local supermarket can command a premium of £21,512 on average compared with property that is located nearby. Houses that are situated near a Waitrose are found to usually command the highest cash premium – fetching around £36,480 more than the average house price in the wider areas of the town.

Homes that are located near a Marks & Spencer hold the second highest premium. These are worth, on average, £29,992 more than homes which are further away. Lloyds Bank compared all the average house prices in postal districts with a supermarket that belongs to a national chain with properties that are located in the surrounding areas of the towns to calculate the price premium that is paid for the homes that are located closer to the supermarkets.

Research has suggested that living near a premium supermarket brand can help boost your properties value significantly. Even chains that pride themselves on discounted products can still fetch some property value gain, with houses located near Lidl valued at an average of £6,416 more than those located in the surrounding areas.

Many homeowners like the idea of being located near a supermarket. It provides ease of use as well as saving on travel costs. The price increase can be a deterrent though, with many refusing to pay the extra costs just so they are located near a supermarket.

Andy Mason, who is the mortgages director at Lloyds Bank has suggested that: “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.” He continued to describe how: “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.”

Mr Mason also stated that: “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, £4,700 lower than in neighbouring areas; today they are £6,400 higher.”

Here is a breakdown of the average house price premium for living near a supermarket, according to Lloyds Bank:

  • 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, £6,416
  • Asda, £4,117