It certainly pays to shop around when searching for the perfect investment property, and not just in the typical way. It seems the type of shops in the vicinity of your property can have a lot of influence on its value. In fact, living near a supermarket isn’t just handy for picking up a pint of milk or a tin of pet food, it can also boost the value of your home by thousands of pounds. However, just how much having a local supermarket adds to a property value very much depends on your local store brand, new research has found.
This house price phenomenon is actually called ‘The Waitrose Effect’. Studies have shown that the average price of a property in the wider postcode of an upmarket grocery store such as Waitrose or Marks & Spencer (M&S) is £1000s higher the average UK house price.
However, despite being called ‘The Waitrose Effect’, it isn’t premium brand Waitrose that has topped this year’s property price supermarket table, it is the US supermarket chain Whole Foods Market (Whole Foods) that commands the highest house price tag, new research from estate agent comparison site GetAgent.co.uk has revealed.
GetAgent’s data found that homes within the wider postcode area of a Whole Foods Market store sold for an average of £969,188 – £738,000 (321%) higher than the average home in the UK costing £230,332; this figure is also 109 per cent higher than £464,089, which is the average price of properties sharing the same postcode as Waitrose stores around the country – the second-highest supermarket brand in the house price league.
However, these figures may not accurately represent house prices in the whole country because Whole Foods only has seven UK stores currently, with all but one commanding a premium London postcode. This may go some way to explaining how the brand managed to scoop the top spot from premium brand Waitrose, which has 338 stores across the country, some in areas where average house prices are a lot lower than in London.
Another surprising entry on the supermarket league table was small supermarket/convenience store brand Budgens, which ranked third on this year’s table. The brand commanded an average property value of £430,838 in the vicinity of its stores, beating both Marks & Spencer (£385,026) and Sainsbury’s (£356,090).
GetAgent’s latest research analysed house prices across thousands of areas and found that houses in areas sharing a common outcode with one of the 13 big-name supermarkets commanded average prices of £308,704, some 34 per cent higher than the current average UK house price of £230,332.
Londis, Tesco, the Co-op, Lidl, Iceland and Morrisons were all home to an average house price higher than the current UK average, while properties local to Asda (£211,069) and Aldi (£197,180) came in with more affordable price tags with average house prices lower than the current UK average.
Founder and CEO of GetAgent.co.uk, Colby Short, commented: “There’s a new sheriff in town when it comes to the supermarket house price sweep and that’s Whole Foods, with house prices surrounding Whole Food stores coming in far higher than even Waitrose.
“Of course, the more ‘prestige’ the supermarket the more likely it is to be located in a wealthy pocket of the UK property market, although some may be surprised to see Budgens ranking above the likes of Marks & Spencer and Sainsbury’s.”
For many, our trips to the supermarket have been one of the few remaining allowable activities during the UK’s strict 10-week lockdown. With current market conditions and a shortage of online delivery slots, a local supermarket could help command an even higher price as people look to travel as little as possible in order to buy their everyday essentials.
Regardless of where you shop, this latest research shows that living within close proximity to a major supermarket is probably going to help boost your house price making a convenient, local supermarket as sought-after as the ever-essential good transport links.
So while homebuyers will more than likely pay above average for the privilege of living close to a supermarket, a property investor’s real aim should be to buy a home BEFORE a premium supermarket opens its doors in the area.