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Better broadband speeds boost property values by £ thousands

by Mark Tyson on 5 August 2014, 13:15

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New research claims that better broadband speeds can boost property values by around 3 per cent. For a £250,000 house that's an extra £7,500… At the extremes of the study, home-movers in London potentially pay up to 8 per cent above the market value for a house with fast broadband, according to USwitch.

Researchers from The London School of Economics and Political Science and the Imperial College Business School examined data compiled from the past 15 years and discovered that homes with the fastest internet connections had higher prices than similar properties with less speedy broadband.

Speed matters

Although "many factors" such as the area, amenities and transportation links can impact on house prices, "when it comes to the access to the internet, speed matters," Professor Tommaso Valletti, of the Imperial College Business School, said. "In this digital age a fast, reliable broadband connection is important; more of us are working from home and using an internet connection to stream TV programmes, make video calls and to browse the web."

The study reveals that the UK property price on average rises by around 3 per cent when internet speeds double. Those who live in the capital are also more likely to pay a premium for brisk broadband, up to 8 per cent above market value for a property with faster broadband. Analysts say Londoners are more inclined to rely heavily on the internet, whether for work or personal use.

"This report confirms that hyperfast broadband makes a property more valuable," Dana Tobak, managing director of Hyperoptic, one of the UK's leading providers of fibre-to-the-home, wrote in an email to HEXUS. "Residents frequently tell us that, after having our fibre installed, they believe their home has immediately become more marketable."

Even though UK broadband is now more affordable than ever many homes are still struggling with terrible speeds. Broadband providers are now investing heavily in fibre optic technology but it could be many years down the line for those homes in rural parts of the UK to become super-fast connected.

Would you pay more for a super-fast connected house?

The broadband checker on the RightMove property search website makes it pretty easy to gauge your prospective home's internet speed. Would you be willing to pay extra for a house with super-fast broadband - or have you avoided buying a house due to its reportedly poor broadband speeds? Let us know in the comments below.



HEXUS Forums :: 27 Comments

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I am currently moving house. Having viewed 100's of property I haven't once asked, nor been told about broadband speeds. And I certainly haven't seen a correlation in house price and broadband availability. Further more I work from home a fair amount so a reliable broadband speed is pretty important to me - and yet it's not even a factor in my choice.

My conclusion; that more expensive houses got broadband earlier - because those residence are considered wealthy enough to fork out for it. That installation maturity translates into faster speed today (very generally speaking) and hence there is a correlation between prices and speed. Otherwise it's tosh.

Actually, it's probably that property in sort after locations are closer to town centres and therefore have the infrastructure. Either way, I disagree with the study! :)
I turned down a house when I found out it had no fibre time frame at all, and Virgin (not that I want them) didn't offer a connection there. It was currently connected at around 3 meg.

As someone who works from home often, with some fairly large files, it was simply out of the question.
Would it sound good on a property ad?
I don't think I've ever considered broadband speed when it comes to properties.

There are enough things to worry about before that would become a deciding factor.
When I was looking for an apartment in Angel it was one of the main deciding factors, sadly even though I'm in zone one in central Angel broadband speeds here suffer really bad with most properties getting under 2Mbit, thankfuly I found somewhere that has both Virgin Media and BT Infinity available and got lucky enough to be put on an early trial run (the trial doesn't expire though I will always get these or faster speeds) of 200/30 so it was win all around.