Why broadband speed should be added to your infrastructure checklist
High-speed broadband should be a feature on every property investor’s wish list. Even as recently as a couple of years ago, when we first highlighted broadband as the hidden advantage for London off-plan property investors, it was clear that a lack of high-speed connectivity could wipe as much as 20% off property prices. Now, high-speed broadband isn’t enough.
If you want to invest in property that will benefit from online connectivity, you must invest where connectivity isn’t simply superfast but is beyond superfast. Currently, this applies to only 3% of the UK. But coverage is set to grow rapidly. Fortunately, we know where.
In this article, we’ll look at why beyond superfast broadband could make a big difference to property prices, and where it’s being connected next.
Why does speed of connectivity matter to property investors?
Put simply, the speed of connectivity matters to investors because it matters to businesses and residents. In a similar way that high-speed rail services are already transforming the property investment landscape, so, too, may the next wave of broadband connectivity.
High-speed rail makes it easier for people to commute and businesses to move goods. It makes it viable to relocate, whether you are a business or a commuter. Those with the foresight to invest in property in cities like Birmingham are already benefitting from high-speed rail – and services haven’t even started yet. Birmingham’s local economy is growing fast. Its population is, also. Bradford is another location that could benefit from high-speed rail.
Businesses – and people – desire super super fast broadband. For businesses, the speed of connectivity is a must-have. Large data files can only be transferred on the fastest broadband. Internet browsing, uploads and downloads happen instantaneously. It’s a definite advantage for businesses.
The way people are living and working is changing, too. People watch films and television programmes via media streaming. They work from home more. These things can only be achieved where the broadband width allows it.
Funding to supercharge connectivity starts in the UK
The government is desperate to increase productivity in the UK. It has realised that faster connectivity speeds are key to this. In the 2017 Autumn Budget, the Chancellor announced a £190 million Local Full Fibre Network (LFFN) Fund, part of a £500 million funding package for digital technology projects.
The first tranche of this digital infrastructure investment was announced in the Spring Statement. £95 million has been awarded to 13 FTTP (Fibre to the Premises) projects around the UK.
The projects being funded include locations in Blackpool, Coventry, London, Manchester, North Yorkshire, and Wolverhampton.
What could be the impact of FTTN on property investments?
In 2015, Hyper-optic commissioned a survey to discover how super fast broadband affects property values and rental prices. It found that people will spend an extra £14,000 on average to buy a home with super fast broadband and that 66% of renters check broadband speed before signing tenancy agreements.
Fibre optic delivers connectivity speeds of more than 1,000 Mbps. Compare this to 24 Mbps currently delivered by super fast and you’ll see that there is no comparison.
Only 3% of UK premises have access to the new gold standard of broadband access. Investing in those locations that will lead the charge in the new digital economy could lead to exceptional returns for property investors. The lesson is to add digital infrastructure to the list of property fundamentals. We did years ago.
Do you want to know where you should be investing in 2018? Contact one of our team today on +44 207 923 6100 and sign up for the Gladfish Newsletter to stay abreast of all the property investment news that matters. We give it to you straight. No BS. No hype.
Live with passion
Brett Alegre-Wood
