Houses near an Amazon warehouse see a boost to their value, says new research

an Amazon package on a conveyor belt in an Amazon warehouseLocal house prices can experience a boost from the arrival of an Amazon warehouse, according to new research.

A study conducted by Opinium on behalf of Paragon Bank found that, on average, towns around the UK saw an average 11% rise in house prices in the year after the warehouses – also known as “Amazon fulfilment centres” – opened.

In real terms, this 11% increase translates as an average boost of £20,269 to UK house prices.

Biggest rises in Dunstable and Altrincham

According to the research, the impact of the fulfilment centres was more notable in the south and the Midlands of England.

Dunstable, a town in Bedfordshire in England, saw a remarkable rise of 23% for the average house price in the year following the opening of the warehouse.

Interestingly, Dunstable also experienced an increase in new business start-ups, rising from 12,440 businesses to 16,300 in just 12 months.

Meanwhile, Altrincham in Greater Manchester breaks the mould for northern towns with the second-greatest rate of house price growth, seeing a rise of 17% to the average value.

Wider economic impact

Alongside the boost to local house prices, Amazon warehouses also had a wider impact on the local economy.

Other key findings of the study included:

  • The number of businesses in the areas increased by 11%.
  • New-build house sales increased by 16%.
  • The number of homes in the private rented sector increased by 2%.
  • Unemployment fell by 7%.

Exceptions to the rule

Naturally, as with any research, there are exceptions to the growth.

Most notably, average house prices in Fife recorded a decrease of 4% in the year following the opening of the Dunfermline fulfilment centre in 2011.

Interestingly, this is also the oldest fulfilment centre that the study looked at.

There are plenty of reasons why this is happened. Wider economic circumstances, Amazon’s lower popularity in 2011, or even simply that the centre was in Scotland rather than England all could have meant that the impact of the warehouse was less meaningful.

More fulfilment centres to be built in the UK

As of September 2021, the retailing giant has 17 fulfilment centres throughout the UK, with plans for a further four more to open before the end of 2021.

These four new centres will be in Hinkley, Dartford, Gateshead, and Swindon.

While you may not be rushing to move to any of these towns, they could present an opportunity for ambitious buy-to-let (BTL) investors.

The impact that Amazon can have on prices could mean a carefully chosen BTL purchase in one of these four towns could see you make a small return on a property in the following year.

Of course, this is by no means a guarantee. If you do decide to take the plunge on a house near one of the fulfilment centres, make sure you take professional advice first.

Work with us

If you need any help with your mortgage or housing needs, then please do get in touch with us at Edinburgh Mortgage Advice.

Email [email protected] or call 0131 339 2281 to find out more.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home.

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