IS THERE ANY TRUTH SO CALLED ‘WAITROSE
YOU might have heard that living next to a Waitrose can dramatically increase the price of your house. It’s one of those things that seems to be accepted the more it’s repeated – like chewing gum taking seven years to digest or Walt Disney being cryogenically frozen after his death (neither of which are true).
Waitrose is a high-end supermarket, which tends to target its products at people with more disposable income. In most studies, they come out more expensive than their mid and lower-end competitors like Tesco and Aldi.
The so called “Waitrose effect” says that having this luxury retail outlet near you will increase the desirability of your area and increase the price of your house.
In the past three months all the UK’s national newspapers have run the story that having a Waitrose nearby will had up to £40,000 to your house’s value. But is there any truth in it?
They generally come from house price studies. In July, Lloyds Banking Group conducted some research in which they claimed “properties close to a Waitrose store receiving an average boost of £38,666 (or 10%) higher than the wider town in which they are located”.
It was this research that prompted all the headlines saying that “Waitrose adds £40,000 to your house price”. What was the research?
Lloyds compared the prices of houses close to supermarkets to house prices elsewhere in the town. It found that living close to a wellknown supermarket chain can add an average of £22,000 to the value of your home. Of course, this varies radically depending on the average house price where you live. Should you be sending petitions to Waitrose headquarters asking them to build a supermarket near you?
Possibly not. It may be that it is not Waitrose that adds to the price but being close to amenities generally.
Sally Francis is a senior writer at consumer advice website MoneySavingExpert.com. She said: “The reality is being in close proximity to any supermarket could be a selling feature of a property but it’s only one factor. There are a host of other things that impact prices.”
Waitrose’s target market tends to be affluent people who are therefore more likely to live in areas with higher property prices. Waitrose will always look to be near its target customers and therefore may deliberately locate in areas with higher property prices.
Douglas Haig, managing director of James Douglas Sales & Lettings, said: “People like having good quality services at their doorstep. Even in times of austerity, it has been clear that people are willing to pay more for a quality service and premium product, assuming they can afford to do so. For many, Waitrose represents this in the supermarket industry.
“However, I don’t believe that Waitrose is a property investor like many of my clients. They do not scout out areas that may improve dramatically over the next five to 10 years. They need the clientele now, not in years to come.
“Waitrose is a very astute business; they identify an area when it is at critical mass of those that are able and willing to buy its products and services.
“Therefore, where Waitrose chooses to position its stores is an indicator of an area that has achieved this level.”
Professor Christine Whitehead, Emeritus Professor of Housing Economics and the London School of Economics, agrees that the factors attracting Waitrose to an area could have more of an impact on the property price than the supermarket itself.