Savills – Slow Broadband Makes it Harder to Rent Rural Property

In a not entirely surprising study Savills, the global real estate provider, has found that broadband speed is now one of the primary considerations for those seeking to rent residential or commercial property in rural areas and poor connectivity can be a huge hindrance.

The “snapshot survey“, which sadly doesn’t tell us how many rural estate agent outlets were involved, claims that 70% confirmed slow broadband is a constraint on letting residential property in rural areas and this rises to 80% when the focus is on commercial workspace.

On top of that the study also warns that poor broadband speed can deter potential tenants from even wishing to view a property and average rents were found to be between 16% and 25% less in areas plagued by slow broadband.

Ben Knight, Director Savills Rural, said:

“Broadband speed is now generally one of the first topics raised by perspective tenants who are looking to rent some commercial office space in a rural area. Where it is poor, vacant periods are often longer and in some cases there is no demand for a building however good the space and other facilities are. And with more people choosing to work from home for at least part of the week it is becoming a more common question from perspective residential tenants.”

Savills has called on landlords to become more vigilant of the need to consider broadband speeds before developing new property and, where necessary, to delay a project or perhaps even develop an alternative infrastructure solution if the local connectivity (usually provided by BTOpenreach) is found to be poor.

Knight added, “While the start-up costs are significant – around £20,000-£30,000 in the first year – annuity income from those using the broadband is a valuable new income stream and of course the likelihood of finding tenants for the commercial space greatly improves.”

The ease of building an alternative network, which is always far cheaper if you lay cables during the early construction phases, will of course vary depending upon the location (e.g. how close is it to a high-capacity fibre optic supply) and size of the development itself. But on smaller projects the cost of building a new network might simply be too steep.

At this point Savills highlights a number of known altnet schemes, such as those built by Wessex Internet and their superfast fixed wireless and fibre optic based broadband networks (e.g. the Rushmore Estate in Dorset).

Ruth Mason, Manager of Savills Rushmore Estate, said:

“This spring a commercial tenant needed to expand his premises and also required improved broadband to cope with the business expansion, which we were able to provide meaning he has stayed at Rushmore. If we hadn’t been able to do so he would have been forced to look elsewhere.

The estate has benefited from being able to offer good connectivity to residential tenants too, attracting some who need to work from home and encouraging existing tenants to settle and stay on the estate, which certainly would not have happened without good connectivity.”

Savills are of course aware of the Government’s Broadband Delivery UK scheme, which is working to roll-out “superfast broadband” (24Mbps+) capable infrastructure to cover 95% of the United Kingdom by 2017/18. A strategy is also due to be announced for tackling the final 5%.

However the real estate provider warns that for more rural landowners and businesses this will simply come “too late” and in the meantime it’s advisable to look for alternative providers rather than adopt the uncertain “wait and see” style approach.

The results will of course come as no surprise to anybody, with the impact of broadband quality becoming an increasingly well understood part of property hunting. Earlier this year one of our own surveys found that 71.9% of respondents would reject an otherwise ideal house if its broadband speeds were too slow, while 22.8% said they’d rather negotiate a lower price (here).