Does the quality of broadband service affect home prices in the United Kingdom, and if so, what is the impact? In some surveys, conducted in 2014 and since indicate consumers would pay more for a home with fast broadband.
Likewise, studies of the link between broadband and economic growth show correlation, at the very least. One study by the World Bank noted that “almost every study, despite the methodology and whether it was cross-country or single country, found a positive economic impact from fixed broadband.”
First of all, note the language: “correlation,” not “causation.”
Also, the “results were sometimes not statistically significant (particularly for developing countries).” In those cases, even correlation cannot be assumed.
A study conducted by the Public Policy Institute of California likewise notes a “positive relationship between broadband expansion and economic growth.”
But “the data and methods do not definitively indicate that broadband caused this economic growth,” the institute says. Still, some claim a causal relationship.
And some studies suggest U.S. home prices might also be affected in the same way, some suggesting difference in value could be three percent to as high as 20 percent.
But “correlation does not necessarily equal causation,” say some researchers studying broadband and home prices.
It is possible that fiber availability drives real estate prices upwards. It also is possible that other variables “may jointly determine both real estate prices and fiber presence.
“Residential properties in markets with high-speed broadband access would be expected to have greater value,” they say. “However, good quality broadband infrastructure is also expected to be rolled out first in high-income areas with high-valued real estate.”
Logic suggests there is some room for such effects in areas with highly-variable internet access service and virtually zero effect in areas where fast internet is ubiquitous.
Some studies suggest there is a relationship between home prices and fast broadband. But lots of variables, including age, income or wealth and race also are correlated with home prices.
A recent study by Housesimple in the United Kingdom looked at the relationship between low-speed broadband and faster broadband within a single postcode. That study shows significant differences on particular streets.
Address
|
Postcode
|
Average broadband speed on the street (Mbps)
|
Current average house price, street (£)
|
Current average house price, postcode district (£)
|
% difference - prices on street vs postcode district
|
Poplar Avenue, Oldham, Greater Manchester
|
OL8 3TZ
|
0.221
|
105,977
|
116,033
|
-8.7
|
St David's Close, Worksop, Nottinghamshire
|
S81 0RP
|
0.290
|
107,819
|
185,936
|
-42.0
|
Milton Road, Cowplain, Waterlooville, Hants
|
PO8 8LD
|
0.338
|
270,134
|
329,028
|
-17.9
|
Cross Lane, Bebington, Wirral, Merseyside
|
CH63 3AD
|
0.354
|
195,553
|
231,846
|
-15.7
|
The Willows, Acaster Malbis, York, NYorks
|
YO23 2XE
|
0.463
|
215,593
|
356,282
|
-39.5
|
May Tree Lane, Waterthorpe, Sheffield, SYorks
|
S20 7HA
|
0.467
|
108,782
|
185,681
|
-41.4
|
Turnpike Road, Connor Downs, Hayle, Cornwall
|
TR27 5DT
|
0.483
|
282,182
|
256,084
|
10.2
|
Rothbury Gardens, Plymouth
|
PL6 8TU
|
0.492
|
241,516
|
224,665
|
7.5
|
Lancaster Road, Out Rawcliffe, Preston
|
PR3 6BN
|
0.549
|
236,558
|
262,371
|
-9.8
|
Moseley Wood Gardens, Cookridge, Leeds
|
LS16 7JB
|
0.551
|
250,796
|
339,084
|
-26.0
|
Blackstone Avenue, Glasgow
|
G53 5DW
|
0.669
|
90,834
|
165,505
|
-45.1
|
Fosbrooke Road, Small Heath, Birmingham
|
B10 9JS
|
0.679
|
147,905
|
153,421
|
-3.6
|
York Crescent, Stourbridge
|
DY8 4RT
|
0.718
|
226663
|
224,042
|
1.2
|
Graham Park, South Dell, Isle of Lewis
|
HS2 0SP
|
0.718
|
86,679
|
118,718
|
-27.0
|
Coppice Farm Park, St. Leonards, Tring
|
HP23 6LG
|
0.719
|
211,333
|
556,974
|
-62.1
|
Oak Close, Little Stoke, Bristol
|
BS34 6RA
|
0.831
|
230,314
|
259,671
|
-11.3
|
Maesyrhendre, Ammanford, Carmarthenshire, Wales
|
SA18 2BW
|
0.839
|
81,399
|
142,626
|
-42.9
|
Phoenix Boulevard, York
|
YO26 4WX
|
0.853
|
250,205
|
305,653
|
-18.1
|
Gratrix Lane, Sowerby Bridge, Calderdale, SYorks
|
HX6 2PX
|
0.922
|
123,098
|
188,444
|
-34.7
|
Laburnum Drive, Milton of Campsie, Glasgow
|
G66 8HY
|
0.948
|
196,328
|
198,557
|
-1.1
|
The research revealed that house prices were on average 24 percent lower on the streets with the slowest broadband speeds, about £182,983 compared to £240,031 for the postcode district.
What we do not know is whether there are other explanations for lower house prices on those streets.
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