New research has highlighted a new phenomenon – the Aldi effect.
The budget supermarket chain, which, along with rival Lidl, has seen a huge rise in popularity in the UK in recent years, is now having an impact on property prices too, according to conveyancing service My Home Move.
We’ve all heard about the Waitrose effect, with property prices tending to be higher in locations with (or close to) a Waitrose. But the opening of a new Aldi store can add an extra £5,000 to the price of local homes, the research revealed.
Aldi, which is now the UK’s sixth largest supermarket chain, is set to have opened some 80 stores by the end of this year. Eleven of these stores opened up between February and April, with nearly all these locations witnessing a rise in property prices.
In Chipping Norton – an affluent town in Oxfordshire famed for the 'Chipping Norton set', a group of media, showbiz and political friends which include David Cameron, Jeremy Clarkson, Rebekah Brooks, Elisabeth Murdoch and Steve Hilton – prices rocketed by 133%.
Clearly, this wasn’t all down to the impact of an Aldi store opening, but the popular low budget supermarket – which appeals to all kinds of demographics – is clearly attractive to local communities searching for a bargain.
My Home Move’s research also found that a third of buyers choose their new home based on its proximity to shops and local amenities, so it’s of little surprise that Aldi – with its cheaper products and strong emphasis on affordability – has helped to have a positive impact on the value of local homes.
Demand for areas with good, affordable local stores is high, even more so at a time when the cost of living is outpacing wages for some and people are subsequently on the lookout for bargains and good-value deals.
With demand high and supply still struggling to keep up, it’s inevitable that house prices will continue to rise in the foreseeable future – good news for sellers across the country, particularly those who happen to live near an Aldi store!
Buyers, increasingly aware of making savings where they can, are opting for locations such as South Ruislip, Billingham and Poynton, all with new Aldi stores and all increasing in popularity.
The only exception to the rule in My Home Move’s research was Reading, where prices have dropped. “With three stores within a two mile radius of the city centre it maybe that consumer demand has now been met,” Doug Crawford, CEO of My Home Move, commented.
In order to compile its findings My Home Move compared the average house price for the three months before a new store opened, to the three months after.
It analysed eleven locations, with only Reading witnessing a fall in property prices. The other ten locations experienced house price rises of between 1% and 133%.
The Aldi effect might not be as well-known a phenomenon as the Waitrose effect, but if things carry on as they are – with the rising popularity of budget supermarkets and more people keen to embark on economy drives – that could soon change.
The Aldi effect could become the new byword for up and coming areas with strong house price growth.
We shall have to wait and see…