Using Land Registry figures, Lloyds Bank have carried out a study that compared the prices of homes in postal districts with a national supermarket with those of homes in the other areas of the town. The results indicated that on average, property prices in areas of a town with a supermarket, were £15,331 (7%) higher than property prices in areas of the same town without a supermarket.
The swanky supermarket Waitrose, is likely to cause the biggest increase in property prices, with the figures indicating a 12% or £38,831 rise. This is closely followed by Sainsbury’s then Tesco, with increases of 10% (£24,507) and 8% (£17,124) respectively.
At the other end of the spectrum, prospective purchasers looking for a bargain, should keep an eye out for a nearby Aldi or Lidl as the study revealed these were the most likely to see a decrease in price. Being located near an Aldi saw house prices fall by £5,910 or 3% and living near a Lidl could potentially see your house lose £4,719 compared to other homes in the same town.
The only supermarket not to cause the house prices to change by more than £1,000 was Asda, which only showed a slight increase of £209 for those properties located near the store.
The mortgages director at Lloyds, Andy Hulme, said:
“With homes in areas close to national supermarkets commanding an average of over £15,000 more than those in the surrounding areas, having a grocery shop within easy reach appears to be high on the list for home buyers looking for good access to local amenities.”
Whilst these results make for rather interesting reading, it must be considered that national supermarkets such as Waitrose, Aldi, Sainsbury’s and Tesco etc. all have their target demographics and as part of their business plans, will carefully decide where to locate their stores.
Waitrose is renowned for being one of the more ‘premium’ supermarkets, therefore they are likely to build stores in areas where house prices are higher. Aldi on the other hand have a different target audience, so as part of their business plan, should be looking to locate stores in areas that best suit that audience.
It could be argued therefore that house prices are not determined by the proximity of a supermarket, but rather the opposite. The location of a supermarket is determined by the house prices of a particular area. A regular chicken and egg scenario, but if you were to spot a property near Waitrose at a bargain price – you might consider snapping it up, just in case.