There are three supermarkets in the small market town where I live. That’s three major chains serving just 14,000 people, not to mention another five within a four-mile radius. So when Sainsbury’s lodged planning permission to build a fourth outlet within spitting distance of the existing shops, local people had had enough. Objections were launched and Sainsbury’s withdrew its bid.
Now I’m wondering if the people of my Northern town made a mistake. According to new research from Lloyds Bank, homes located close to a Sainsbury’s are likely to command around £26,000 more than other properties. Of course, that’s a national average and, given house prices in the North, homes in my neck of the woods wouldn’t benefit from that kind of premium. Still, it’s something to think about.
Lloyds found that homes within easy reach of a local supermarket are, on average, £21,512 higher than in nearby areas. Not surprisingly, people living near a Waitrose were the best off, with the average price for those properties typically £36,480 higher than the wider town average (£429,118 versus £392,939).
Those living close to a Marks and Spencer have the second highest premium, with properties worth an average of £29,992 more than homes further away, followed by Sainsbury’s (£26,081). Even discount chains like Iceland (£22,767) command a strong premium. In fact, areas close to budget supermarkets have seen biggest house price rises, with growth of 11 per cent in three years. This is a faster increase than for all supermarkets (9 per cent) and marginally higher than for all areas in England and Wales (10 per cent). In postal districts with an Aldi, the average house price has grown from £178,809 in 2014 to £198,810 in 2017 – an increase of £20,000. In addition, areas with a Lidl have seen average price grow of £23,722 (from £216,258 to £239,981).
Andy Mason, Lloyds Bank mortgages director, said: ‘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 homebuyers looking for good access to local amenities.
‘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. 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.’
Helen Nugent is Online Money Editor of The Spectator
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