The high street has often been used as an indicator of the prosperity of the local area, be it due to the brands that have set up shop or the number of people who frequent the shopping district. However, as time has gone on, eCommerce has become far more prevalent, with more and more people opting to order their goods online rather than visit their local high street.
The high street may not see as many people shop in certain stores anymore, but the store brands and visible health of the high street are still used by estate agents and prospective buyers when considering the value of a property. As perception is so vital to the property market, any tells that the area may be on the more valuable side will be taken into consideration.
The ‘Waitrose Effect’
It has almost become cliché, but many studies have found that what is known as the ‘Waitrose Effect’ does impact property prices. The ‘Waitrose Effect’ concerns the impact of house prices when larger, better-regarded high street chains set up shop in a local area, subsequently increasing house prices due to the impression that those brands give valuators. It was found that properties close to a Waitrose get a premium of around £38,666 while those near an Aldi get a premium of around £1,333.
In further studies within the county of Hertfordshire, brands found in a town were seen as having a huge impact on the average house price in their respective area. Brands like McDonalds, Peacocks, and Primark were found to de-value property prices from between 24 and 22 percent, while brands like Waitrose, M&S, Hob Salons, and Zaza upped property prices. While the likes of McDonalds and Primark tend to save customers money compared to other brands, their presence tends to de-value the prices or properties in the local area.
Foot traffic is still an important factor
Despite what was shown above, the impact of a high street on local property prices can be negatively impacted by there being too many high-brow brands in an area. If the local populous can’t afford to fill the stores or the stores aren’t to the liking of locals, empty and closed shops can do more harm than good, regardless of the brand.
So, finding the right balance is important, with foot traffic through stores and on the high street being a primary indicator of an affluent area – provided that not all of the shops are ‘value’ brands. A lot of extra foot traffic can be generated, believe it or not, by stores having an online presence. Not only does online familiarity help encourage people to visit brick-and-mortar stores, but it was found that most people seek a multi-channel experience.
Brands and types of stores that generate large amounts of traffic online and foot traffic on the high street can be very complimentary to property valuations. One such example is that of leading gambling brands. Not only will they seek to have a strong presence online, they also aim to have a place on high streets to further increase brand awareness. However, the strength of the brand is still important. Brands like William Hill that have managed to establish themselves as a leading name in all areas of online betting and especially online casino gaming on a global scale, from the UK to Canada, as you can see over here, enhance the foot traffic for their high street presence through positive brand association.
People may be more familiar with their online offerings, but as the brand is considered to be a leading name, a betting shop on the high street will earn foot traffic. Furthermore, as betting is a service that changes its offering every day – with different contests and events taking place – people often make repeat or regular visits to the shop. En route to the betting shop, they may also pop into other stores advertising their wares down the street.
Perception is everything in property, and just by deploying a bit of snobbishness when overlooking a local high street, you can get a general sense of how it impacts property pricing. Think busy with foot traffic as a strong indicator for higher prices, but a prevalence of budget brands leading to lower prices.
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Daniel Peacock