Supermarkets: top of the homebuyer shopping list?
Homes in close proximity to supermarkets command an average price premium of £15,000
New research from Lloyds Bank has found that the average house price in areas which offer residents easy reach of a local supermarket is around 7% (£15,331) higher when compared to other areas within the same town which don’t.
By comparing average prices in postal districts (e.g. NE20), which have a national supermarket, to the wider post town (e.g. Newcastle), it has been possible to identify the average house price premium or discount associated with the proximity to some of the UK’s largest grocery retailers.
Properties in areas with a Waitrose, Sainsbury’s or Tesco are most likely to command a higher house price premium when compared to the wider town average. The average price premium for properties within easy reach of a Waitrose is 12% (£38,831) higher than the wider town, Sainsbury’s 10% (£24,507) and Tesco 8% (£17,124). [Table 1]
The analysis also looked at locations with the highest area to town house price premium. Chiswick in Hounslow, Ponteland in Newcastle and Golders Green in Barnet command the greatest average property prices when compared with the surrounding town average. [Table 2]
The average house price in Chiswick, which offers residents a Waitrose, Sainsbury's and Marks and Spencer, is £918,287. This is a premium of 117% or £495,601 when compared to the average price for the borough of Hounslow. Ponteland, which has a Waitrose, Sainsbury's and Co-Op, and Golders Green, which has a Sainsbury's and Marks and Spencer, have premiums of 110% (£195,623) and 88% (£456,829) respectively.
Andy Hulme, Lloyds Bank mortgages director, commented: “It’s easy to assume the effect of different factors on the value of a property but this research enables us to clearly see that there is a significant association between the convenience of a local supermarket and house prices.
“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 homebuyers looking for good access to local amenities.”
Regionally the greatest house price premium that can be aligned to a supermarket presence is in the West Midlands, where areas with a local Waitrose command an average 37% (£66,130) more than the surrounding town. This is followed by the same supermarket in the North West 33% (£63,921) and London 14% (£76,188). [Table 3]
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Notes to Editors:
Table 1 - Supermarket locations with largest house price premium - November 2014
Average House Price Average House Price Postal District to Post Postal District to Post in Postal District with Supermarket in Post Towns in Town Town supermarket in England and Wales £ premium/discount % premium/discount £ England and Wales £
Waitrose 354,378 315,547 12% 38,831 Sainsbury's 273,381 248,875 10% 24,507 Tesco 237,074 219,949 8% 17,124 Marks & Spencer 304,494 285,708 7% 18,786 Co-Op 217,378 202,367 7% 15,011 Iceland 238,094 228,705 4% 9,389 Morrisons 203,032 197,552 3% 5,480 Asda 188,531 188,741 0% -209 Lidl 218,165 222,884 -2% -4,719 Aldi 177,993 183,903 -3% -5,910
Table 2 - Top 10 Supermarket locations with largest house price premium - November 2014 Post Postal Town District House Post Average Postal Average Price Premium Supermarket Locality town/Borou Price 12 District House Premium £ gh months Price 2014 % to Nov £ 2014 £ Waitrose, Sainsbury's and Marks and Spencer W4 Chiswick Hounslow 918,287 422,686 117% 495,601 Waitrose, Sainsbury's and Co-Op NE20 Ponteland Newcastle 373,629 178,006 110% 195,623 Sainsbury's and Marks and Golders Spencer NW11 Green Barnet 978,288 521,459 88% 456,829 Waitrose, Sainsbury's and Co-Op BS8 Clifton Bristol 392,961 239,473 64% 153,488 Waitrose and Co-Op BS9 Henleaze Bristol 391,238 239,473 63% 151,765 Aldi, Co-op and Tesco M20 Didsbury Manchester 239,595 148,499 61% 91,096 Waitrose, Marks and Spencer and Iceland B17 Harborne Birmingham 245,315 157,450 56% 87,865 Winchmore Sainsbury's N21 Hill Enfield 523,794 341,068 54% 182,726 East Iceland N2 Finchley Barnet 786,058 521,459 51% 264,599 Marks and Spencer, Co-Op Summertow and Tesco OX2 n Oxford 617,422 413,326 49% 204,096 Note: Average house price in 12 months to November 2014 in postal district of supermarket location compared to postal town. Source Land Registry for house prices and CACI Ltd for supermarket locations
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Table 3 – Greatest Regional House Price Premium/Discount Regional by supermarket - November 2014 House Price House Price Region Supermarket Premium/Discount % 2014 Premium/Discount £ 2014 North East Tesco 2% 3,504 North West Waitrose 33% 63,921 Yorkshire and the Humber Sainsbury's 2% 3,043 West Midlands Waitrose 37% 66,130 East Midlands Waitrose 7% 13,593 East Anglia Waitrose 2% 4,769 London Waitrose 14% 76,188 South East Waitrose 10% 32,950 South West Waitrose 11% 27,923 Wales Co-Op -5% -8,595 Note: Average house price in 12 months to November 2014 in postal district of supermarket location compared to postal town in region. Source Land Registry for house prices and CACI Ltd for supermarket locations
DATA SOURCES: 1.Supermarket locations
Supermarket locations has been supplied by CACI Ltd, November 2014. A supermarket is defined as where the store selling space is greater than 3,000 sqft.
2. House Prices
House prices for 12 months to November 2014 from Land Registry. The prices used in this research are simple arithmetic ('crude') averages. These prices are not standardised and therefore can be affected by changes in the sample from period to period.
For further information, please contact:
Eve Speight 0207 356 2162 [email protected]
"This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance. © Lloyds Bank all rights reserved 2015"
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