The ‘Waitrose Effect’ on House Prices
It has long been acknowledged that living in a house within a short distance of a supermarket is desirable – if nothing more than for convenience.
In a decade where the demand for instantaneous results has become the norm both on and offline, resulting in a decreased attention span and increasing time restraints, the prospect of getting the shopping done as quickly as possible and under one roof has never been more attractive.
Living within close proximity to a supermarket (or at least within its delivery catchment area) is one way of decreasing your shopping time; but how much does this ‘privilege’ cost?
Lloyds Bank Investigates…
A 2016 study by Lloyds Bank revealed that it’s not just living near a supermarket which impacts property prices, but also the name of the supermarket.
The study drew a comparison between average house prices in English and Welsh postal districts where a supermarket was present and the surrounding towns where one was not.
The results revealed that on average, a nearby supermarket boosts house prices by £22,000!
Unsurprisingly, brand perceptions were a contributing factor to the premium paid to live near a supermarket, with Waitrose commanding a significantly higher premium than price conscious chain, Aldi.
Despite a slight decline in the ‘Waitrose Effect’ from last year, the supermarket chain adds approximately £38,666 to the price tag of nearby houses. This is down from £38,831 in the previous year.
Waitrose, it appears, is a (large) step ahead of the rest, with Sainsbury’s and Marks and Spencer ranking second and third, commanding a premium of £27,939 and £27,182 respectively.
Sitting mid-table, Tesco, Iceland and the Co-operative still add a sizeable chunk to property values in their surrounding area, however a long way off the dizzying heights of Waitrose, ranking first. Living near a Tesco can add approximately £22,072 to the value of your home, whilst Iceland (£20,034) and the Co-operative (£17,904) are perceived to be less valuable.
Towards, the bottom of the rankings –but still valuable to homeowners nonetheless, are Morrisons (£10,558) and Asda (£5,026).
Lidl and Aldi, both fast growing chains with an increasing presence within the UK, have gained traction in recent years, winning price conscious consumers from their larger competitors and working hard to change the perception that cheaper products means poor quality. As a result, living near Aldi and Lidl can increase house prices by £1,333 and £3,926.
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