Does Entry of Food-and-Drink Establishments Raise Local House Prices? Event-Study Evidence from London

TL;DR

This study investigates whether the opening of food-and-drink establishments in London leads to increased nearby house prices, finding evidence of gradual price appreciation following such commercial entries.

Contribution

It provides empirical evidence linking food-and-drink establishment entries to local house price increases using a novel event-study approach in London.

Findings

House prices increase by about 0.5% in the event year.

Prices rise to roughly 3.4-3.7% by years four and five.

Results support the idea of local amenity capitalization.

Abstract

Restaurants, cafes, pubs, and takeaways are among the most visible markers of neighborhood change, yet whether their arrival is capitalised into nearby housing values remains empirically unsettled. We assemble a London-wide panel linking Land Registry prices, non-domestic EPC lodgement timings for food-and-drink establishments, and neighborhood amenity measures at the LSOA level. Our preferred annual event-study design defines treatment as the first clean-onset year in which an LSOA records at least two eligible EPC lodgements for food-and-drink establishments, after a two-year lookback with no prior entries. In this specification, pre-trend tests are not rejected in either the stacked or Sun-Abraham estimators, and log house prices rise gradually from about 0.5% in the event year to roughly 3.4--3.7% by years four and five. The results are consistent with local amenity capitalization following commercial entry, while remaining appropriately cautious about endogenous siting and concurrent redevelopment.