Fast internet speeds boost UK property prices

Home owners in London are willing to pay up to 8 per cent above the market price for properties in areas offering very fast internet speeds, according to a new study.

Researchers from LSE and Imperial College Business School have 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, show that property prices across the UK increase on average by about 3 per cent when internet speed doubles.

Londoners show a greater willingness than the rest of the country to pay for broadband, reflecting very high usage in the capital city for both work and personal reasons.

It is also makes economic sense for internet service providers to roll out high-speed broadband in cities, where population density is high.

However, there is growing pressure on governments to intervene and make high speed broadband universal.

The European Commission has set a target by 2020 that every European citizen will need access to at least 30 Mbps and at least 50 per cent of households should subscribe to internet connections above 100Mbps.

"In rural areas it would make more sense for governments to adopt less expensive fixed and mobile technologies that deliver decent and reliable speed," said Gabriel Ahlfeldt, associate professor of urban economics and land development at the London School of Economics and Political Science.

“In urban areas a levy on landlords, who ultimately benefit from the improvements, could help saving taxpayers’ money when rolling out fibre”.

The news follows a report by mobile analytics firm RootMetrics earlier this week, which found that reliable mobile phone signal is the number one priority for young home buyers.

Strong signal ranked more highly among young buyers than the council tax band the property fell into, and hospital access. Consequently, schools ranked as the lowest concern when considering a property.