In this post we’ll take a look at how broadband speed and phone signal might affect the business of buying and selling property.
When buying (or renting) a property most people assume that it has basic services connected and that they will work as they should. It’s generally a safe assumption to make too. After all, electricity is electricity, water is water and, well, drains are drains.
It’s not quite the same for mobile phone signal and broadband quality though. These are also considered basic services today. But, as most of us know, they can vary considerably in availability and quality from place to place.
While not too long ago this wouldn’t have mattered too much good phone and broadband is now pretty much as critical as reliable electricity and water supplies are. As well as leisure activities like gaming and streaming more people working from home has increased the importance of good phone and Internet connections.
So does broadband speed and phone signal affect the value and saleability of property? And if so by how much?
This report says sluggish broadband speeds can slash a property’s value by 20% and can even stop it selling.
This report quotes research saying half of all buyers would avoid an area with poor broadband completely. It says that a good Internet connection has become one of the most important things people look for in a property. It suggests good Internet counts more highly with buyers than kerb appeal, double glazing or being close to the shops.
This report based on a survey commissioned by O2 says that 70% of house hunters would walk away from a property if the local mobile signal wasn’t up to par, while 31% would pay more for a property with a good signal. It says 20% are prepared to pay up to £10,000 more.
How might this affect the business of selling property?
There’s currently no requirement to say anything about broadband quality and phone signal when selling a property. Property portals like Rightmove, for example, may indicate the fastest possible speed of the fastest broadband package that is available at that address. But this doesn’t mean it will actually be available of course. In many ways it’s better not to make any claims and simply recommend that potential purchasers (or tenants) make their own checks on what is actually available at the address.
This situation might change in the next few years however. Broadband speed and phone signal might become part of the material information that sellers must disclose when marketing a property.
The National Trading Standards Estate and Letting Agency Team (NTSELAT), together with industry partners, have been working on an initiative to clarify what material information should be disclosed in property listings. Part A of this initiative came into effect this May. It means that a property's Council Tax band or rate, price and tenure (for sales) should now be included in all property listings.
Part B of this initiative will extend what material information should be included in property listings even further. It will cover disclosure of utilities (and similar), where non-standard features would affect someone’s decision to look any further at that property.
The details of Part B of this initiative are currently being considered and there is no date for when they might be introduced as yet. But potentially this could have significant implications for the property market.
Pros and cons
Including information on what are now essential services should be good for buyers. It will make more of the information they need to decide whether to view or buy a property more readily available.
It could be a problem for sellers as well as agents, however. If your property suffers from poor broadband and phone signal there is little you can do about it. Except wait and hope it will improve. Could having to provide this information in listings make it difficult to get viewings for a property with poor connections? Could it mean having to price affected property lower to attract buyers? If so, what would sellers think about that?
Another problem that could arise might be if the broadband speed and phone signal noted in a listing does not materialise for some reason after a buyer has moved in. This might be for some reason totally beyond the seller’s control. As most people know signal strength and broadband quality varies from provider to provider, the layout of a property and even what devices are in use in the property. If the buyer has bought because a certain quality of connection was important to them, and it turned out to be poorer, what would happen then?
In summary it’s probably fair to say that the question of broadband speed and phone signal quality is still very much in its early days as a relevant issue when selling or buying a property. It’s likely to become an even bigger issue in the future however.