How much is living near a supermarket worth?

Research from Lloyds Bank has found that homes within easy reach of a local supermarket are, on average, £21,512 higher than in nearby areas.

Properties in areas with a Waitrose, Marks and Spencer, Sainsbury’s or Iceland are most likely to command a higher house price premium when compared to the wider town average. And prices near upmarket supermarket brands can be particularly high. For example, the average price for properties within easy reach of a Waitrose is typically £36,480 higher than the wider town average (£429,118 versus £392,939).

Those living close to a Marks and Spencer have the second highest premium, with properties worth an average of £29,992 more than homes further away, followed by Sainsbury’s (£26,081) and even discount chains like Iceland (£22,767) command a strong premium. Homes within easy reach of all four supermarket chains are trading at an average premium of 9%.

Areas close to budget supermarkets have seen biggest house price rises, with growth of 11% in 3 years

House prices close to an Aldi, Lidl, Morrisons or Asda have grown by an average of 11%, or £21,400, since 2014. This is a faster increase than for all supermarkets (9%) and marginally higher than for all areas in England and Wales (10%). In postal districts with an Aldi, the average house price has grown from £178,809 in 2014 to £198,810 in 2017 – an increase of £20,000. In addition, areas with a Lidl have seen average price grow of £23,722 (from £216,258 to £239,981). However, in cash terms the largest price increases remain in postal districts with a Waitrose – £33,015 (from £396,104 to £429,118) or 8%.

The average house price in an area with a Waitrose store is £429,118 – the most expensive of all the chains – and more than double compared to areas with an Aldi store (£198,810), which is the least expensive. The next most expensive are areas with a Marks and Spencer (£350,263) and Sainsbury’s (£314,154).

The ‘Waitrose Effect’ is clear; having a premium brand on your doorstep means buyers typically need to pay top prices. But the research also shows that areas with ‘budget’ stores have, on average, seen the most rapid house price growth in recent years.

There has been some suggestion that the likes of Lidl and Aldi are increasingly locating in more affluent areas where prices are already relatively high. Indeed, in 2014 house prices in areas with a Lidl were, on average, £4,700 lower than in neighbouring areas; today they are £6,400 higher.”

The ‘Waitrose Effect’: Waitrose dominates in eight out of ten regions with largest price premiums

In eight out of ten regions across England and Wales, properties command a premium price compared to other areas in the same town where there is a Waitrose. The greatest house price premium, in cash terms, that can be aligned to a supermarket presence is in the North West. Areas with a local Waitrose store in the region command an average price that is £80,272 (38%) more than the surrounding town. This is followed by the same supermarket brand in the West Midlands (£76,812 or 40%) and Yorkshire and the Humber (£53,924 or 30%).

Large price premiums to have a supermarket on your door step

This review also looked at locations with the highest area to town house price premium, with, Ponteland in Newcastle and Chiswick in Hounslow commanding the greatest average property prices when compared with the surrounding town or local authority borough average.

The average house price in Ponteland, which has a Waitrose, Sainsbury’s and Co-Op, and Chiswick, which offers residents a Waitrose, Sainsbury’s and Marks and Spencer, is 104% and 89% higher respectively than in surrounding areas. In cash terms the premium to live in Ponteland is £200,856 higher than in Newcastle as a whole (£393,502 v.£192,646); whilst in Chiswick this figure is more than double at £444,011 when compared to the average price for the borough of Hounslow (£940,218 v. £496,207).

In the 10 locations with the highest premiums, eight feature Waitrose, Sainsbury’s and Marks and Spencer. The remaining two areas are Chorlton and neighbouring Didsbury in Manchester with a house premium of 74% or £125,945 and 58% (£98,043) respectively. These areas are dominated by Morrisons, Co-Op, Aldi and Tesco.

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Stamp duty cited as cause of slow April transactions

The latest stats and analysis from HMRC has shown that property transactions were down slightly during April – a 3.2% drop when compared to the previous month.

According to HMRC, the provisional seasonally adjusted UK property transaction count for April 2017 was 99,910 residential and 9,980 non-residential transactions – 20.3% higher compared with the same month last year. However, HMRC warned that direct comparisons of residential transactions between April 2017 and April 2016 should be avoided due to the unusually low level of transactions in April 2016. This was associated with the introduction of the higher tax rates on additional properties introduced in this month.

Stephen Wasserman, Managing Director at West One Loans, comments: “The property market will take a while to fully recover from the jitters caused by stamp duty hikes and economic uncertainty. On top of this, the result of the upcoming General Election is likely to have an impact over the coming months. Nevertheless, we’re confident the sector will bounce back. Although the market is resilient, during times of prolonged economic uncertainty it is important that borrowers are aware of the range of financing available. Flexible borrowing options, such as bridging loans, can help to speed up the transaction, enabling buyers to move faster and capitalise on opportunities in this uncertain environment.”

Shaun Church, Director at Private Finance, comments: “While residential transaction levels are significantly higher than a year ago, the changes to stamp duty for second homebuyers in March 2016 render an annual comparison pointless. Homeowners and investors rushed to beat the deadline last year, which led to an explosive March followed by a quiet April for the residential market. Today’s market remains slightly sluggish, with the number of seasonally adjusted transactions dipping between March and April.

The upcoming election is unlikely to be having a significant effect on property transactions, particularly as the residential market took last year’s Brexit vote in its stride. The main reason behind weaker transaction figures remains the changes to stamp duty, which have particularly limited activity towards the upper end of the housing market.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “At first glance one might think these figures are hugely disappointing but when you consider what was happening this time last year and what has happened to property transactions in the past few months, they represent steady progress for the housing market. Transaction numbers are really key to what is going on in the market – how many people are actually getting on with the business of moving – and these numbers suggest some resilience.

What the HMRC figures do show is the huge impact that changes to stamp duty can have, not just on property transactions but the wider economy bearing in mind how many people are dependent in other trades on people moving home.”

 

Do party manifestos go far enough on leasehold reforms?

The Conservative and Labour party manifestos published last week include policies to reform certain leasehold practices, including high ground rents and the sale of leasehold houses. But Leasehold Solutions says the policies do not go far enough to tackle other major problems with the leasehold system.

Louie Burns, Managing Director of leading leasehold enfranchisement specialists, Leasehold Solutions, said: “It is encouraging to see that both the Conservatives and Labour are paying attention to some of the problems with leasehold, such as escalating ground rents and the sale of new-build houses as leasehold, particularly as neither party even mentioned leasehold in their 2015 manifestos. The policies outlined in the respective manifestos are a first step in the right direction, but they are insufficient to bring about the reforms needed to free home owners from unfair leasehold practices.”

The Conservative Party manifesto includes a commitment to “crack down on unfair practices in leasehold, such as escalating ground rents.” However, although Prime Minister Theresa May previously stated in Parliament in March that she ‘doesn’t see why’ developers are selling new-build houses as leasehold, the Tory manifesto stops short of calling for policies to reform other aspects of the leasehold sector, such as banning the sale of new-build leasehold houses.

The Labour Party manifesto goes further, promising to give leaseholders “security from rip-off ground rents and end the routine use of leasehold houses in new developments.” Meanwhile, the Liberal Democrats’ manifesto makes no reference to leasehold reform.

 Burns continued: “While the sale of new-build leasehold houses has garnered much media attention, the number of these properties is the tip of the iceberg when compared to the volume of leasehold flats coming onto the market in Britain. Many people are also unaware of the implications of letting their lease length fall, which can significantly increase the cost of a lease extension when the time remaining on the lease falls below 80 years.

“Even if onerous ground rent practices are curbed or outlawed, the owners of leasehold flats will still be stung by high fees when they need to extend their lease or purchase their freehold. A better solution would be to abolish the unfair leasehold system, but regrettably none of the major political parties looks to be considering such a reform at this stage.

“The issue of onerous ground rent clauses certainly also needs to be addressed, but it’s equally important that we look again at leasehold valuations, as the system works to the benefit of the freeholder. Under the current valuation methods, which are heavily weighted in favour of freeholders, leaseholders are required to pay inflated fees to extend their lease or purchase their freehold, which costs property owners millions of pounds in additional costs each year.

“We also need a better mechanism for holding errant developers to account; before the leasehold houses scandal, many home owners were unaware that their freehold had been sold out from under them to institutional ground rent investors. These leaseholders are now quoted fees in excess of £40,000 to purchase the freehold, or they are being offered unsatisfactory solutions like converting their 10-year doubling ground rent to one linked to the rate of inflation.

“These are not solutions that will enable the affected home owners to purchase their freehold outright or free themselves from having to pay unfair fees for permissions and licences attached to the lease. We hope the next government will enact legislation to help these people to take back ownership of their freehold at a fair and realistic price.”

What could be the cost of getting on the UK ladder in 2030?

eMoov.co.uk, has released its latest research into the future of the UK property market, by mapping what the average house price across England, Scotland and Wales could look like by 2030, as well as breaking the capital down by each borough.

eMoov looked at the increase in UK property values between 2000 and 2015 and found property prices had increased by 84% during this time. eMoov then applied the same increase across each area of England, Scotland and Wales to project how much the average property could set you back in just 15 years’ time.

London

Of course, the capital took the top spot in terms of the highest value, with the average London house setting you back over £1m in 2030.

eMoov also broke London down by borough to show what values across the capital could look like 15 years from now.

If you aspire to live in the capital in 2030, the best bet for getting on the ladder is Barking and Dagenham with the lowest average house price in London. However, come 2030 the definition of affordable is somewhat different to today, as the average property in Barking and Dagenham will cost you over £450,000, compared to £246,000 today.

At just shy of £1.9m Kensington and Chelsea has long claimed the title of London’s most expensive borough for property prices. But by 2030, even the well to do may struggle to secure a property in the borough, with the average property costing £3.4m!

England

By 2030, the average house price across England could be as much as £457,433, close to the current asking price in the capital. Based on the current market, the only areas of England that will offer an average house price under £280,000 in just 15 years’ time are Merseyside (£275,074), East Riding of Yorkshire (£277,411) and Durham (£279,985)

Other than London, 12 counties across England will also be home to an average house price over £500,000. Property across Dorset, East and West Sussex, Kent, Essex, Berkshire, Surrey, Oxfordshire, Hertfordshire, Buckinghamshire, Cambridgeshire and Rutland will all command more than half a million pounds on averag

Wales

The current trend of London homeowners moving to the surrounding areas may soon become a national trend of English homeowners looking to Wales. In 2030 the average house price in Wales will hit £307,712, expensive but £150,000 cheaper than England. In fact, just Monmouthshire (£442,141) will offer an average house price over £400,000.

Scotland

It’s a similar story to the north, as the projected average house price for Scotland in 2030 is the cheapest of the three at £297,222. Edinburgh is still the driving factor with the highest price of the lot at £432,468, joined by Aberdeenshire as the only other Scottish location to break the £400,000 mark.

At £200,600, North Lanarkshire offers the best value for Scottish buyers in 2030.

Russell Quirk, founder and CEO of eMoov.co.uk, commented: “The past 15 years have seen extreme growth in the price commanded for UK property, as well as a crash as a direct result of this inflated growth. Although this research is only a projection of what may happen by 2030, it is safe to assume that with prices continuing to spiral beyond affordability, history could well repeat itself.

Although rising prices are always good news for current homeowners, it’s extremely worrying to look at the difficulty many have in getting on the ladder at the moment, let alone with a price jump of 84% by 2030.

This map highlights just how dangerous this current artificial inflation of the market could be in the long run, it’s not just London that will become beyond the reach of the average UK homebuyer, the issue will spread the length and breadth of England, Scotland and Wales.”

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HS2 compensation plan: the property zones where owners could be on track for up to £22,500 under the Homeowner Payment Scheme

The rail link will bring Birmingham within an hour’s reach of the capital by 2026, but those affected by the noise of the trains can claim compensation now.

Homeowners living near the route of HS2, the high-speed rail link from London to Birmingham, are entitled to payments of up to £22,500 to compensate for increased noise.

The line, which is due to start running in 2026, was at the centre of more controversy this week after French railway firm SNCF announced it was bidding with Virgin Trains to run the route.

The first phase of the line will run from Euston to Birmingham, with the second part a two-pronged extension to Leeds and Manchester.

Trains will run under the capital in a tunnel from Euston, via Camden, Swiss Cottage, Queen’s Park and Kensal Green, with a station at Old Oak Common

The tunnel will continue via Park Royal, Perivale and Northolt, emerging in West Ruislip. It will run overground until just west of Chalfont St Peter in Buckinghamshire before disappearing into another tunnel until just south of Great Missenden.

From there, it will pass near Aylesbury and Twyford and on to a new terminus at Birmingham Curzon Street station in just 49 minutes, cutting the journey between the cities by 32 minutes.

COMPENSATION ZONES
Homeowners living near tunnelled sections of the route will not be eligible for compensation, but the maximum payment of £22,500 will be made to those living between 120-metres and 180-metres from the centre of the track.

People living closer than 120m have been offered a variety of compensation schemes, including voluntary purchase by the government or, for those who don’t want to sell up, 10 per cent of the “pre-blight” value of their property.

For homes between 180m and 240m away, the payment will be £15,000, while for those living from 240m to 300m away, it will drop to £7,500.

HOW IT WORKS
Homeowners living near the route of HS2, the high-speed rail link from London to Birmingham, are entitled to payments of up to £22,500 to compensate for increased  noise. To qualify, your house or 25 per cent of the total area of the property, including the garden, must be within the designated distances.

If the property straddles two zones, payment will be determined by the zone your house sits on and householders whose land, but not their house, sits on the outer band could still receive compensation.

HOW TO APPLY
To be eligible for payments, you must be an owner-occupier, a freeholder or leaseholder – with longer than three years left – and have bought the property before April 9, 2014.