Home owners in London are willing to pay up to 8% above the market price for properties in areas offering very fast internet speeds. This is according to new research from LSE and Imperial College Business School.
In the first study of its kind, researchers analysed the value of broadband to English households, looking at the link between property prices and broadband availability.
Statistics compiled over a 15-year period, from 1995-2010, showed that property prices across the UK increased on average by about 3 per cent when internet speed doubled.
While the increase in value was even greater when starting from slow internet connections, an increase from 8 to 24 megabits per second raised the property value by no more than one per cent.
“The capital’s willingness to pay a premium for good internet coverage strengthens the case for rollout of high speed broadband in densely populated areas,” the researchers said.
South African situation
In South Africa many households still do not have access to fast and affordable fixed broadband access.
According to a recent investor presentation by Telkom COO Brian Armstrong, households which demand high speed broadband are expected to growth from the current 1.4 million to 2.9 million in 2020.
South African telecoms operators have been slow to address the need for fast and affordable fixed line broadband access, especially when it comes to fibre to the home (FTTH).
Considering the demand for high speed broadband access, and the impact on house prices, some neighbourhoods started to take matters into their own hands.
The Parkhurst Residents and Business Owners Association (PRABOA) is building its own broadband network, and has selected Vumatel to supply fibre to the homes in the area.
Other neighbourhoods are now following suit, clearly showing there is a strong demand for quality fixed broadband access.
Fighting against broadband network rollouts
Curiously, home owners are often the cause of delays in rolling out broadband networks in their neighbourhoods.
Some people are fighting the erection of cellular masts in their areas, while others make it challenging to dig up pavements and roads to deploy fibre infrastructure.
The latest research, which shows a clear link between broadband speeds and house price value, is likely to change perceptions.
A mobile tower and a pavement being dug up for fibre may well be seen as a bonus when people are looking for homes in a certain area.