'˜Waitrose effect' can add £40,000 to house prices

Living near a supermarket boosts the average value of a house by as much as £38,666, new figures from Lloyds Bank have revealed.

‘The banking group’s research shows that living close to a well-known supermarket chain pushes the average value of a home up by £22,000, with those in proximity to one of the premium brands enjoying an even larger increase.

Living close to a Waitrose helped drive up values by £38,666 (10 per cent) compared with the wider town but even those properties near discount retailers such as Lidl and Aldi saw some rise in their value.

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The study compared house prices for postal districts including a supermarket against the prices in the wider town to to calculate the premium enjoyed by those near a supermarket.

The presence of a Waitrose store had the most marked effect, followed by Sainsbury’s (£27,939), Marks and Spencer (£27,182), Tesco (£22,072). At the other end of the scale were Aldi (£1,333), Lidl (£3,926) and Asda (£5,026).

Mike Songer, Lloyds Bank mortgage director, commented: "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.

“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."

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The Waitrose effect is most prominent in the North West of England, where the average house price in an area with a Waitrose is £73,629 (39 per cent) higher than in the surrounding areas (£263,687 v. £190,058). Other regions with a high premium are the West Midlands (£57,539), Yorkshire and the Humber (£36,376) and the South East (£31,681).

Supermarket chains with largest premiums

Chain Postal district avg value Wider town Diff (%) Diff (£)

Waitrose £425,428 £386,763 10% £38,666

Sainsbury's £316,056 £288,117 10% £27,939

Marks & Spencer £342,077 £314,895 9% £27,182

Tesco £272,288 £250,216 9% £22,072

Iceland £257,055 £237,021 8% £20,034

Co-op £238,448 £220,545 8% £17,904

Morrisons £222,462 £211,904 5% £10,558

Asda £207,771 £202,745 2% £5,026

Lid £236,127 £232,201 2% £3,926

Aldi £196,502 £195,169 1% £1,333

Regional house price premium

Region Chain Diff (£) Diff (%)

North West Waitrose £73,629 39%

West Midlands Waitrose £57,539 30%

Yorks & Humber Waitrose £36,376 20%

South East Waitrose £31,681 9%

South West My Local £29,432 11%

Wales Waitrose £14,725 7%

East Midlands Waitrose £12,600 7%

East Anglia Waitrose £5,417 2%

North Marks & Spencer £4,667 3%