Doubling your broadband speed adds an average of £5,670 to the value of your house if you’re selling, say economists.
Research by the London School of Economics found that Internet speed is directly related to the value of your property, with an UK average boost of three per cent for doubling your connection’s speed.
Londoners will pay up to eight per cent above the standard market value of a house or flat in an area with high Internet speeds, although moving from 8Mbps to 24Mbps broadband only increases the value of your home by one per cent.
Dana Tobak, MD of Hyperoptic, a company that specialises in installing gigabit Internet to communal residential properties, said: “We welcome this report, which confirms that hyperfast broadband makes a property more valuable.
“Many buildings that we have connected with our gigabit broadband were on less than 5Mbps – leading to a negative online experience. Residents frequently tell us that, after having our fibre installed – enabling 1 Gig, they believe their home has immediately become more marketable.”
The statistics were collated over a 15-year period between 1995 and 2010 and show that property prices across the UK were three per cent higher than the standard value when Internet speeds double.
This could mean the price of your average £188,949 home (the average UK house price in 2014) increases by £5,670 if superfast broadband is installed.
The European Commission (EC) has set targets that every European citizen will need access to a 30Mbps connection by 2020, with half of these properties requiring 100Mbps speeds.
However, there’s still a big gap between superfast broadband in urban and rural areas and although schemes like the BDUK’s rural broadband rollout is making some headway with schemes in Cornwall, the Isles of Scilly and Scotland leading the charge, getting urban areas up to speed is a bigger challenge.
Gabriel Ahlfeldt, associate professor of urban economics and land development at the London School of Economics and Political Science, said his research suggests governments should adopt different technology and funding models for different areas.
Ahlfeldt said: “In rural areas it would make more sense for governments to adopt less expensive fixed and mobile technologies that deliver decent and reliable speed. In urban areas a levy on landlords, who ultimately benefit from the improvements, could help saving taxpayers’ money when rolling out fibre.”
The full report Speed 2.0: Evaluating Access to Universal Digital Highways, is available to download from the LSE’s Spatial Economics Research Centre.