Does Lidl drive up property prices?

There are some things that are well-known for driving property prices up: the proximity of good schools, the quality of the view, and having shops like Waitrose nearby, for example. However, researchers have identified a new driver of property prices - the presence of a Lidl. Apparently being a stone's throw from the budget supermarket adds value in 80% of cases.

The research was from online estate agents, Housesimple.co.uk, which looked at some of the major towns and cities in the UK with a branch of Lidl. They then compared prices in those areas to those of a neighbouring town which didn't have a store.

They found that on average those with the discounter were 19% more expensive - or an average of £29,000. They decided that this is likely to mean there's a 'Lidl effect' - where well-heeled shoppers who frequent the discounters are looking for a store in the locality.
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The findings
They found, for example, that the average house price in the Reading postcode RG45, which has a Lidl, is £447,428. This compares to the neighbouring postcode RG12, which doesn't have a Lidl, where average house prices are £274,381.

It's the same in Nottingham. The Lidl postcode NG7 has average house prices of £145,786, compared to the neighbouring postcode NG6, which has no Lidl, and where average house prices are £105,497.

They found a 38% difference in Coventry, 30% difference in Brighton, 27% in Birmingham, 23% in Sheffield, 20% in Manchester, 12% in Stoke, 10% in Newcastle, 9% in Liverpool, 8% in Southend-on-Sea and 7% in Ipswich.

Of the areas they studied, only Bournemouth, Leicester and Southampton were cheaper in the areas with a Lidl

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Why?
Alex Gosling, managing director of online estate agents Housesimple.co.uk, suggested the discounters were responsible for the change. he said: "There's no longer a stigma attached to shopping at budget supermarkets like Lidl and Aldi, and that is clearly reflected in average house prices. Although the likes of Aldi can't boost house prices in quite the same way as a Waitrose or Marks & Spencer opening, budget supermarkets, rather than lowering the tone of an area, seem to be having a positive effect on local property prices."

However, there's another explanation. Typically Lidl used to open in cheaper postcode areas, where they appealed to those shopping on tight budgets. However, the discounters are actively seeking more affluent shoppers, so are looking to open stores in wealthier parts of town.

Recently the chain has opened in areas like Knutsford in Cheshire, Maidenhead in Berkshire and Dorking in Surrey. The store revealed it would also be opening in expensive central London soon. The speed of expansion is dramatic, with plans to open 50 stores a year. Given there are just 600 stores around, newer stores in posher areas already make up a decent proportion of the current stores - and that proportion is set to grow.

It all comes down to the question you ask. If you're looking for a Lidl effect, you're bound to see one, as stores move into posher areas of town. However, if you want to know why houses are expensive in Dorking, it's unlikely you'd find many people who attribute it to any significant extent on the arrival of a Lidl.

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