When potential U.K.-based home buyers click to RightMove, a real estate listing site, they can search for a home by number of bedrooms, location, and school district – all important variables in a home search. Recently, the company added another variable that is becoming just as important as property size and number of bathrooms: broadband speed. Real estate professionals aren’t surprised because they’re seeing it firsthand that homes that don’t have high speed access are quickly falling out of the running.
“It’s absolutely gone up the priority list rapidly. Ten years ago broadband was a nice-to-have. Now, it’s absolutely essential,” says Edward Rook, partner and head of Country department with real estate firm Knight Frank.
There is research to back this up. According to an October 2021 survey, Bricks and Clicks, 84 percent of property agent respondents saw an increase in enquiries about the quality of home broadband. The number one reason for the uptick, according to the report, is the desire to work from home. “For such buyers, the quality of the broadband connection is more important than home office space, the size of the garden, or the proximity to local amenities,” says Paul Harrison, the London-based director of Communications at Huawei, which commissioned the report.
Why Broadband MattersCovid-19 was the impetus for this push for faster broadband, say experts. For example, the Office for National Statistics (ONS) this May reported that the number of people working from home in the U.K. more than doubled between 2019 and 2020, with 8.4 million people saying they completed their career duties from their place of residence. (Nine million people who were placed on furlough were not included in the study, according to the ONS.) Londoners had the highest work-from-home rate, at more than 46 percent of employed people.
“We’ve moved forward ten years over the past 18 months because of Covid,” agrees Knight Frank’s Rook. “Everyone was forced to work from home in lockdown almost overnight, so the reliance on technology has been enormous. People rely on good connectivity. A few years ago, you would tolerate a poor connection. Now, it’s absolutely essential. If we don’t provide a potential buyer with information up front, they will always ask before they actually make a bid. If a buyer is choosing between an apartment with fantastic signal strength and an apartment without, then the one with is going to win every day, every time.”
This is why property agents are increasingly fielding questions that go deeper than simply whether or not a home has broadband connectivity. The Bricks and Clicks survey found that 74 percent of queries to agents are related to the availability of full fibre connectivity. Two-thirds of agents were asked about the specific broadband speed available at a property, while another two-thirds reported that buyers want to know if the broadband that’s available covers every room within a home.
Indeed, there’s a strong preference for high-speed connectivity, and it’s raising home prices, according to the report. About a third of agents say a property with gigabit broadband would be worth over £5,000 more than the same property without broadband. This is demonstrated by what buyers are saying, according to real estate professionals.
Seven out of ten agents stated that buyers of new home builds expect internet connectivity speed that’s higher than standard xDSL services (70Mbps). In the Northwest this number climbs closer to 90 percent. Overall, more than a third of agents say their customers are looking for houses with speeds of more than 300Mbps. This was particularly common in the Northwest and London where 43 and 42 percent of customers, respectively, requested such availability. Considering that 300Mbps is three times the current national average broadband speed in the U.K., this is a big ask for most, especially since there are some locations in the U.K. that are sorely lacking, says one expert.
“There are many places in the UK that don’t have decent internet, so when you’re thinking of your location, it seriously matters. And that obviously influences where demand is going to be greatest,” says Michael Ball, a real estate expert and professor at the University of Reading’s Henley Business School.
The benefits extend beyond working from home, streaming movies, and playing online video games. High speed broadband affects a country’s wellbeing. For every ten percent increase in broadband penetration, the gross domestic product of a country rises between a quarter of a percent and 1.2 percent. Unfortunately, the United Kingdom is at a disadvantage when it comes to fibre-based broadband penetration, especially compared to countries in the European Union and North America. According to market research firm Omdia’s Fiber Development Index, which maps fibre investment in more than 80 of the world’s leading broadband countries, the United Kingdom comes in 49th -- way behind Sweden, Spain, Denmark, and Norway (7, 8, 9, and 10, respectively.) The United States holds the 19th place, while France and Canada are 20 and 21. Out of the European Union only Austria and Greece scored worse, coming in at 55 and 60, respectively.
Looking forward, it will be imperative for builders, buyers, and sellers to advocate for better broadband connectivity including full fibre networks and fibre to the property (FTTP). Currently, most homes have fibre to the cabinet service, where the last mile is comprised of slower copper wires that can provide connectivity speeds around 30Mbps. Ministers in 2019 promised that all U.K. homes would have access to full fibre – and the accompanying gigabit speeds – by 2025, but once the pandemic took hold that promise was reduced to 85 percent of homes.
“It feels a bit like in the middle of the 20th century when home buyers wanted to know if a home had internal network wiring and a telephone,” says University of Reading’s Ball. “If you didn’t have a home phone you were completely cut off from the world. That just how those with buffering Broadband feel in the 21st century.
You can read the full report here