Aldi and Lidl catching up with Waitrose effect on prices

The “Waitrose effect” commands the biggest cash premium - costing £43,571 or 12 per cent more than average house prices in the wider town, followed by properties close to a Marks & Spencer with a premium of £40,135 and Sainsbury's, with an uplift of £32,707. Homes within easy reach of all three supermarket chains are trading at an average premium of 12 per cent.

In the past year the premium attached to living within walking distance to a Marks & Spencer has grown by £10,143, the largest rise amongst the supermarket chains. By comparison, the price premium near a Waitrose has grown by a relatively modest £7,000 in the past year.

Those who live close to an M&S may be affected by the company's recent decision to close over 100 stores by 2022.

Homes close to a Tesco are also worth over an average of £21,000 more than other properties in the nearby area closely followed by Co-Op, £21,020. Smaller local stores like a Little Waitrose, Sainsbury's Local or Tesco Extra attract a higher average premium of £58,109 compared with a larger superstore, which brings an 11 per cent or £30,580 gain.

But it's homes near to budget supermarkets which have seen the biggest house price rise: properties near to Lidl, Aldi, Morrisons and Asda have increased 15 per cent, an average of £29,316, over the past four years, which shows that properties near discount stores can also be popular.

Over the past four years average house prices in places with an Aldi grew by a fifth, 20 per cent from and average £178,809 to £213,765, a much faster increase then then the rest of the town's 16 per cent average.

Other areas with a supermarket chain to record the fastest price growth in the past four years include those with a Co-Op, up 16 per cent from £224,679 to £259,969 and Morrisons, (up 14 per cent from £203,756 to £233,261.

According to Lloyds, 2014 property prices close to an Aldi traded at a discount of -£3,586 compared to the wider town. In 2018, homes near Aldi now fetch a higher price premium compared to the rest of the town, at an average of £2,301. Homes near a Lidl are also worth £5,411 more than other properties in the nearby area.

Yorkshire has seen examples of the Waitrose effect. When the supermarket opened a branch in Meanwood, Leeds, in 2010, it put the brake on prices that were falling during the recession. Of course, the area, which is close to Headingley and the city centre, was already being eyed up by developers who had spotted its potential but the upmarket supermarket added extra kudos and helped attract more home buyers to a location once deemed downmarket.

According to Manning Stainton estate agents, within a year of Waitrose opening, there was a 30 per cent rise in home buyer enquiries.

Otley has benefitted from having a Waitrose. The lure of its posh nosh and fine wine is often highlighted in property brochures.