It’s become common folklore that house prices near a Waitrose outperform those further away.
The claim comes from a 2016 Lloyds Banking Group study, which coined the phrase the “Waitrose effect” for the mysterious rise in house prices in the vicinity of the supermarket.
But how true is this claim? Do Scottish house prices really rise the closer you get to a Waitrose?
Waitrose adds nearly £40,000 to house prices
By looking at houses in the same postal area as a Waitrose compared to those that are not, the Lloyds study asserts that property values are 10% higher than those in the same town but further away.
In real figures, that means properties close to a Waitrose have, on average, an extra £38,666 added to their values.
For comparison, being close to a Marks and Spencer added an average of £27,182 to a property’s value, while Sainsbury’s homes saw an extra £27,939 added to their value.
Problems with the study’s conclusions
However, there are some issues with the conclusions from the research that mean you shouldn’t necessarily take them as gospel.
Houses closer to amenities have higher values
While the research used the phrase the “Waitrose effect”, it might be better termed the “supermarket effect”, as other supermarkets were also seen to add value to house prices.
Using the same method of comparison across postal areas, the research found that homes nearer an Asda saw an average £5,026 increase. Similarly, Lidl saw a rise of £3,926, and Aldi also saw an added premium of £1,333.
While these figures may be lower, the trend would suggest that it’s simply the convenience of being near a vital amenity such as a supermarket that adds value to a home, rather than specifically Waitrose.
The conclusion could be the wrong way round
It’s also equally possible that the conclusions have positioned cause and effect the wrong way round.
Waitrose’s prices are some of the highest in the supermarket sector, as the supermarket famously favours and targets higher-income customers.
As a result, it’s possible that Waitrose chooses to build stores in areas with higher house prices, in the hope of finding their target clientele there.
This would mean that house prices dictate the locations that Waitrose choose to build in, rather than the other way round.
The research only studied English and Welsh house prices
Perhaps most importantly of all, the research only covered areas in England and Wales.
That means all the data only considered what happens in these areas, with no mention of how the presence of supermarkets affects Scottish house prices.
As a result, it’s not possible to make comparisons with Scottish house prices, as there’s no hard data to support the hypothesis.
Get in touch
If you’d like to find out more about house prices in your area, please get in touch with us at Edinburgh Mortgage Advice.
Email [email protected] or call 0131 339 2281 to speak to us.
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