Generation Rent Reveals the Other Waitrose Effect Hitting Tenants

Lobby group Generation Rent has uncovered the “Other Waitrose Effect”, which shows how the opening of a new Waitrose is closely linked to a rise in evictions of private tenants in the local area.

The analysis, conducted by Oxford University academic David Adler for Generation Rent, found that the arrival of a new Waitrose was associated with an increase in the number of evictions of between 25-50%.

This is the Other Waitrose Effect – in addition to a rise in prices, which is good news for property owners, comes the increased threat of a no-fault eviction for local private tenants, as landlords look to achieve higher rents.

Adler, a post-graduate student in the Department of Politics and International Relations at the University of Oxford, says: “The Other Waitrose Effect illustrates the hidden costs of gentrification. On the one hand, local homeowners both enjoy new local amenities like Waitrose and the increase in house prices they bring with them. On the other, private renters face increasing insecurity in their homes and the possibility of being priced out of their neighbourhoods.”

The traditional Waitrose effect, whereby the stores add a premium to local house prices, is a well-established phenomenon, quantified originally by Lloyds Bank in 2016. The arrival of a Waitrose branch is both a reaction to signs that an area is becoming wealthier, and a magnet for further investment by local businesses and demand by wealthy homebuyers.

Generation Rent Reveals the Other Waitrose Effect Hitting Tenants

The Other Waitrose Effect on evictions follows the same trend:

According to the Generation Rent report, Causes and Consequences of Evictions in Britain, published in October 2016, rising house prices encourage landlords to evict their tenants in order to free up their property for sale or to hike rents.

Waitrose is both attracted to areas where these trends are underway, and a cause for their intensification.

Private landlords can evict tenants without needing to give a reason using Section 21 of the Housing Act 1988. Tenants served with a valid Section 21 notice to quit have no defence, and will often move out within the two-month notice period, without the landlord taking further action.

The Waitrose Effect analysis examined Ministry of Justice data on accelerated evictions – the nearest measure of Section 21 evictions that the Government publishes – and opening dates of Waitrose stores between 2005 and 2015. It found that there were 70 Waitrose stores nationwide in 2005 and 162 by the end of the period in 2015.

During the 2008-09 recession, evictions dipped as house prices fell and landlords lost confidence. After house prices started to recover in 2010, evictions picked up again, but increased significantly more in the 92 local council areas that acquired a Waitrose.

In one example, the rate of evictions in the London Borough of Lambeth spiked as the area gentrified. In just one year, from 2009 to 2010, house prices in Lambeth rose from an average of £247,238 to £290,340 – an increase of 17%. Quarterly evictions tripled the following year. In the course of this rapid transformation, Waitrose opened on Clapham High Street in spring 2013, and evictions in the borough have continued to grow.

By the first quarter (Q1) of 2015, areas with a Waitrose had nearly twice as many Section 21 evictions on average than areas without one. The data covers only those cases where bailiffs were involved; because tenants cannot appeal against a Section 21 eviction, many more leave without the process even reaching court and are therefore not recorded.

Generation Rent is calling for greater protections from eviction for tenants caught up in rapid economic change in their local areas. Where landlords want to evict tenants who have not broken their tenancy agreements, the group suggests that they should be reimbursed for the inconvenience. This would help to cover the cost of finding a new home and encourage landlords to sell with sitting tenants instead, it claims.

Adler comments: “When house prices rise, landlords feel more confident about their investment and more willing either to take a risk by replacing their tenants, or to realise the value of their asset through sale. The arrival of a Waitrose is one of the most visible signs of gentrification, which reinforces this confidence and sustains both higher prices and higher evictions.”

The Director of Generation Rent, Dan Wilson Craw, adds: “Renters already fear they won’t be able to settle down in their local area thanks to rising house prices. The last thing they need is the threat of losing their own home. New businesses providing job opportunities and a greater choice for shoppers in a local area should be welcomed, but because evicting tenants is so easy, too many people are losing out.

“Waitrose would agree that a strong community relies on local people investing their time in it, but they can only do that if they have the confidence they’ll still be around in a year’s time. Proper protection from eviction will do that.”

Estate agent Marsh & Parsons recently found that independent shops have replaced the Waitrose effect: /independent-shops-waitrose-effect/