According to an article* in The Daily Mail, Savills Estate Agents have examined how the cost of homes with a Waitrose in the same postcode compares to those in the rest of the same county.
The verdict was that the typical price of properties with a nearby branch was 25.3 per cent higher. For example, a home in Amersham, which has a neighbourhood Waitrose, typically costs £456,000, while the average for Buckinghamshire is £360,000. The situation is even more extreme in London, where a local branch can add 50.3% to average prices....
Obviously 'quality of neighbourhood' comes very high on retailers' shopping lists when searching for new store locations, so it could be said that Waitrose tend to build in neighbourhoods where house prices are already at a premium...a good example of the chicken/egg conundrum often faced by NAMs in their attempts to distinguish cause and effect in the day-job... Either way, as the recession continues, it could be said that grocery sales even in 'Waitrose' areas will become increasingly vulnerable to discounter-appeal, the Aldi effect, eventually resulting in a downward pressure on house prices?
Accordingly, in relating house-price sensitivity to 'outside factors', it could be beneficial to get personal and explore the impact of continuing triple-dip recession (you don't really believe that 0.3% increase represents growth in the economy??) on a NAM's biggest asset...
Taking an investor's approach to house valuation, where a house is deemed to be worth twenty times its annual rental i.e. a 5% yield, the Amersham example at £450k would require a rental of £1,875/month to make it a viable investment.. In other words, it could be said that housing in the UK is overvalued, and in the event of continued economic flat-lining, house prices will eventually fall to a 'proper value'...
In most countries outside the UK & ROI, houses are regarded as homes, places to live, and not investment assets, and their use of a conservative 20x multiplier means they have been less susceptible to housing bubbles...and the consequent impact on spending.
All of this means that there is a potential 'housing-correction' in the UK pipeline that will prolong the flat-line demand, and this 'straight-curve' needs to be factored into NAMs' forecasts, in spite of political re-assurances to the contrary....
It follows that opportunities lie in wait for those NAMs that live in 'reality mode' while others await a return to normal....
The verdict was that the typical price of properties with a nearby branch was 25.3 per cent higher. For example, a home in Amersham, which has a neighbourhood Waitrose, typically costs £456,000, while the average for Buckinghamshire is £360,000. The situation is even more extreme in London, where a local branch can add 50.3% to average prices....
Obviously 'quality of neighbourhood' comes very high on retailers' shopping lists when searching for new store locations, so it could be said that Waitrose tend to build in neighbourhoods where house prices are already at a premium...a good example of the chicken/egg conundrum often faced by NAMs in their attempts to distinguish cause and effect in the day-job... Either way, as the recession continues, it could be said that grocery sales even in 'Waitrose' areas will become increasingly vulnerable to discounter-appeal, the Aldi effect, eventually resulting in a downward pressure on house prices?
Accordingly, in relating house-price sensitivity to 'outside factors', it could be beneficial to get personal and explore the impact of continuing triple-dip recession (you don't really believe that 0.3% increase represents growth in the economy??) on a NAM's biggest asset...
Taking an investor's approach to house valuation, where a house is deemed to be worth twenty times its annual rental i.e. a 5% yield, the Amersham example at £450k would require a rental of £1,875/month to make it a viable investment.. In other words, it could be said that housing in the UK is overvalued, and in the event of continued economic flat-lining, house prices will eventually fall to a 'proper value'...
In most countries outside the UK & ROI, houses are regarded as homes, places to live, and not investment assets, and their use of a conservative 20x multiplier means they have been less susceptible to housing bubbles...and the consequent impact on spending.
All of this means that there is a potential 'housing-correction' in the UK pipeline that will prolong the flat-line demand, and this 'straight-curve' needs to be factored into NAMs' forecasts, in spite of political re-assurances to the contrary....
It follows that opportunities lie in wait for those NAMs that live in 'reality mode' while others await a return to normal....
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