Rents for homes next to shopping centres may reduce -...

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19 August 2021

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Rents for homes next to shopping centres may reduce - not rise

The popular belief that homes in close proximity to shops inevitably pushes up the rent is being challenged by new research.

The budgeting website Thinkmoney has analysed the average price and rent of homes within the postal district of the 33 largest shopping centres in the UK.

It’s compared the average price of properties and rent within the town or city the shopping centre is located, to reveal how much property prices could be impacted.

To the surprise of some, rent was shown to have decreased around £171 for homes very close to the largest shopping centres.

For example, the average rent near Westfield in west London is £1,863 - a drop of £505 pcm on the average rent in the W12 west London postcode.

Likewise renters around Brent Cross shopping centre pay an average of £451 less per month than those who live in the rest of the area.

It’s not just a London phenomenon - in Newcastle rent around the Metrocentre is £310 cheaper per month than other places to rent in Gateshead.

Robert Burdett of James Leigh Property Management says: “There is a clear link between shopping centres and house price values, but it isn’t as simple as the closer you are the more valuable property becomes.

“House prices can be up to five per cent 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.

“That said, shopping centres employ hundreds, if not thousands of people, many on fairly low wages, so there is a requirement for homes that are accessible to this group, which creates a need for quality, affordable homes.

“These could be rental properties or high-density housing where values are lower, but competition can be fierce. 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.”

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