Whether you love or hate shopping centres, you’re likely haven’t thought much about the effect they have on house prices. Is your house more or less valuable for being near a shopping centre? Research by Think Money shows that postcodes have a big impact on house prices. And sharing a postcode with a shopping centre can be especially significant.
Do house prices go up or down if they’re close to a shopping centre?
Surprisingly, it can be both. According to Robert Burdett, MD for James Leigh Property Management, “House prices can be up to 5% higher where there is easy access to a decent shopping centre, but this effect is not necessarily in the immediate vicinity, where areas tend to be more commercial, traffic can be heavy, and homes, generally speaking, are less desirable to the demographic that is likely to visit the shopping centre.”
One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.
In short, living within easy reach of a shopping centre can have a positive impact on house prices. But living too close can have the opposite effect. According to numbers published by Think Money, houses sharing a postcode with Westfield London cost an average of £744,447, while the closest town sees averages of £1,005,920. The same is true of house prices near The Centre:mk. Those sharing its postcode average £207,429, while properties in the closest town average £296,989.
Burdet goes on: “Having said this, the impact of shopping centres on house prices has been mitigated somewhat by Covid, and other factors like the lack of available property for sale and the Stamp Duty holiday.”
Are rental prices also affected?
Mortgages aren’t the only thing being affected by proximity to a shopping centre. According to Think Money, rent prices also decrease for properties near shopping centres – and the numbers are significant. For example, rents near Westfield London average £1,863, while just one town away they stay around £2,368.
On average, living very close to a shopping centre reduces your rent by around £171 per month.
Other factors that affect house prices
The UK property market has enjoyed a boom of late, partly because of the Stamp Duty holiday. Things are starting to slow down a little now that Stamp Duty thresholds are returning to their pre-pandemic levels. But house prices are expected to remain high because of competitive mortgage rates and low interest rates.
And while a shopping centre isn’t great for property value, supermarkets might be. This is known as the ‘Waitrose Effect’. According to Propertista, living near an upmarket grocery store can increase house prices by the thousands. Whole Food Markets had the biggest effect on prices, with houses near them selling for 321% more than the average UK home. Waitrose is next with a 101% increase. Even Marks and Spencer (67%) and Budgens (87%) make a difference.
Local amenities, good schools and the size of the property all affect house value as well. So does the availability of parking (even if it’s just easy on-street parking) and the proximity to public transportation.
In the end, though, the single most important factor to affect house prices continues to be location. As property prices continue to grow, nothing can beat a popular neighbourhood.