Estate Agent Claims Slow Broadband Can Wipe 25% off UK House Values

Online estate agent House Simple has claimed that houses in broadband slowspots could lose 20-25% off the potential value of their property because buyers have become much more savvy and are increasingly paying attention to the quality of local Internet connectivity.

The news is hardly a revelation and indeed several other studies (here, here and here), including a few of our own surveys, have reached similar conclusions (albeit with different predictions about the actual impact on value). Suffice to say that a figure of 20-25% is generally way above what most have predicted to be the actual impact.

A recent study by LSE and the Imperial College Business School, which examined 15 years’ worth of data to identify the impact of faster Internet access on UK house prices, concluded that property prices increase by an average of around 3% when the available broadband speeds doubled. A separate survey conducted by Halifax claimed that 20% would pay more for “good broadband” (this was defined as speeds greater than 2Mbps) and 67% of those were prepared to pay up to 3% more, while 22% would pay between 4% to 10% more.

In other words, yes, the quality of broadband can have an impact upon the value of a property, but equally this remains a highly subjective consideration. Personal choice is different for everybody and we don’t all look for the same thing, although most of us do consider broadband to be a critical service and as such will be more likely to shun a home that can’t deliver reasonable connectivity.

Similarly, as we get closer to seeing the Government’s national target achieved, which aims to make fixed line superfast broadband speeds of 24Mbps+ available to 95% of the population by 2017, then this may become less of an issue. At least it will until much of the existing technology requires yet another upgrade in order to help it keep pace again.