Having a premium brand supermarket on your doorstep can add over £40,000 to the value of your home or twice that of budget stores.
Living within walking distance of a supermarket adds an average of £21,500 to the value of your home according to the latest date from Lloyds Bank.
Having a premium brand supermarket on your doorstep will increase property values by as much as £43,571 for Waitrose, Marks & Spencers this is £40,135 and for Sainsbury’s higher by £32,707.
The data shows the budget supermarkets such as Aldi and Lidl are popular and cheaper, driving property prices higher and are catching up fast.
Easy access to supermarkets could be important for first time buyers and home movers although you would need a higher deposit or larger mortgage to afford these properties.
Supermarkets driving up house prices
Buyers are willing to pay a premium for homes in areas within walking distance to a Waitrose, Marks & Spencer or Sainsbury’s compared to the wider town average.
In the past year this premium has increased with Marks & Spencer grown by £10,143 from £29,992 to £40,135 whereas Waitrose has grown by a relatively modest £7,000 in the past year.
The following table from Lloyds Bank shows supermarket locations, average house prices and the largest premium to February 2018.
| Supermarket | Wider area |
With stores |
Premium |
|---|---|---|---|
| Waitrose | £376,540 | £420,112 | £43,571 |
| Marks & Spencers | £303,662 | £343,797 | £40,135 |
| Sainsbury’s | £287,803 | £320,510 | £32,707 |
| Tesco | £257,278 | £278,647 | £21,369 |
| Co-Op | £238,948 | £259,969 | £21,020 |
| Iceland | £242,978 | £260,424 | £17,445 |
| Morrisons | £221,915 | £233,261 | £11,346 |
| Lidl | £239,276 | £244,687 | £5,411 |
| Aldi | £211,463 | £213,765 | £2,301 |
| Asda | £213,567 | £215,054 | £1,487 |
Andy Mason Lloyds Bank mortgages director said, this research clearly shows that there is a significant link between the convenience of a local supermarket and house prices.
For remortgage buyers living near supermarkets, the premium gives them an opportunity to release capital which they can use to improve their home which could further raise the value of their home.
Homes close to a Tesco, the UK largest supermarket, have a premium of £21,369 to the wider area average followed closely by Co-Op with £21,020 and Iceland on £17,445.
The biggest rise in house prices are for homes near budget supermarkets such as Lidl, Aldi, Morrisons and Asda with increases of 15% or £29,316 over the past four years compared to the average of 10% for all locations with supermarkets.
For buy-to-let landlords the higher house price would require a larger deposit and mortgage although they could command a higher rental income due to location.
Large variations in premiums paid
There are large local variations in the premium paid to have a supermarket on your doorstep depending on the area.
Chiswick in Hounslow offering Waitrose, Marks & Spencer or Sainsbury’s has prices of £1,021,701 with a 94% premium or £496,246 when compared to the average for the borough of Hounslow.
For Golders Green in the borough of Barnet shoppers have access to the same three stores as Chiswick, the average price is £1,029,390 and the price premium is 52% or £352,297 above the wider area.
For older homeowners living close to supermarkets the premium allows the equity release mortgage buyer to access more wealth and maintain their lifestyle or give to a child or grandchild for a deposit on their first home.
Other regions have similar large premiums such as Trumpington in Cambridge with an average price is £695,496 and price premium of 55% or £248,062.
Premiums are also paid where there are smaller local stores such as a Little Waitrose, Sainsbury’s Local or Tesco Extra attract a higher average premium of £58,109 compared with a larger superstore £30,580.
What are your next steps?
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