Does better broadband mean higher property prices?
Can broadband affect the value of a home? At first glance it may seem faintly ridiculous, but consider just how important the internet is to many of us now. Home working is more popular than ever and even if you’re not using it for business purposes we are reliant on internet access for entertainment, shopping, online banking, and much more.
It is the fourth utility after water, electricity and gas and there’s growing evidence that absence of fast broadband can indeed impact the value of a home or make it harder to rent. Matt Powell from Broadband Genie explains how broadband is affecting prices and some suggestions for getting the best possible speeds.
Faster broadband, higher prices
Last year ISPReview conducted a survey of its visitors which revealed some worrying numbers for anyone trying to sell, buy or rent a home in an area with poor broadband. Their research found that 71% of buyers would reject an “otherwise ideal home” if the available broadband did not meet minimum requirements, while 22% said they would attempt to negotiate a lower price. And 67% said the minimum acceptable speed was 50Mbps, significantly higher than the UK average of 28.9Mbps and the government target of 24Mbps for 95% of premises.
Some respondents to the poll even indicated they’d be willing to pay more for a home with faster broadband - nearly 6% said they’d pay 3-4% extra and almost 5% said 4% or higher. As this was conducted by a broadband website these stats will be leaning in favour of people who value internet access very highly, but it’s also borne out by other studies.
A comprehensive report carried out by the London School of Economics used 15 years of data to examine the impact broadband had on house prices. This showed that on average house prices increased by 3% when broadband speeds doubled. And a study from 2014 suggested that slow broadband could knock as much as 20% off the value of a home.
The issue of slow broadband is especially troublesome in rural areas, where availability can be even more limited. Savills conducted a survey which found that nearly 70% of respondents said that slow broadband was a constraint on letting properties in rural locations.
Solutions for slow broadband
If you’re trying to sell, rent or buy property and slow broadband is an issue there are some things you can try to improve the situation.
First off, whatever your situation it’s a good idea to examine availability in the area. When selling and renting you’ll want to anticipate the question of broadband if it comes up, and if you’re thinking of buying a place and broadband is important you should confirm availability yourself.
While any ISP can run a basic check, the best way is using the broadband availability tools at www.SamKnows.com. This provides a detailed breakdown of broadband services at every exchange in the country. Ideally, you need to check using both a phone number and a postcode for the most accurate results. If a search is conducted with a postcode it will only provide data for the area based on the closest exchange, but does not guarantee service to a specific address.
Reporting a technical fault
In some cases broadband may be slow due to a technical problem. When signing up to an ISP they should always provide an accurate speed estimate, so if the actual performance falls far below this it can be investigated as a technical issue. After running through some steps to check the equipment inside your home, the ISP can conduct line tests and, if necessary, deploy an engineer.
Most home broadband is delivered over a fixed line, using either the BT network (which is used by ISPs such as Sky and TalkTalk as well as BT itself) or the Virgin Media network. If neither of these is available or suitable there are other options.
Mobile broadband - especially using 4G - is now capable of providing very fast internet access. This can be suitable as an alternative to fixed-line broadband provided there is a strong signal, however due to the limited data allowances it is not particularly cost effective, especially for heavy usage such as video streaming and large downloads.
Satellite internet is another alternative to consider if you’re in a very remote area. As it does not rely on telephone lines or ground based wireless towers it works just about anywhere. And speeds are reasonable too, with the latest services offering up to 30Mbps. But satellite does have some drawbacks, in particular expensive installation costs and a very high latency (or “lag”) which renders it unsuitable for some tasks.