Let’s imagine, a single person, of reasonably independent means, able to work from home at least part of the time. Not the most typical buyer, but he or she has the virtue of simplifying things so that we can focus a little.
Let’s simplify a little more: our buyer has been able to exploit a strongly rising market such they have the option of trading down, if they are willing to move outside Cardiff, and pay cash. So mortgage is not an issue.
They choose their area – Caerphilly, a smaller town surrounded by beautiful scenery. The town is more affordable than Cardiff and, with a strong sense of community, so they chose the town.
It isn’t a trick question, but a real purchase decision about three years ago: what settled the deal was the roll-out of BT’s fibre broadband. The town had it while other towns / villages didn’t even have a planned install date – and the buyer could not work without fast, reliable broadband. And when the buyer moved in, something else cropped up: only one of the mobile phone companies had anywhere near acceptable 4G coverage, and even 3G was spotty for the others.
To those who use it for work, connectivity is not a consumer choice, but a factor of production.
But let’s fast-forward to today and add in those pesky families of consumers. In the short space of three years, online streaming has blossomed. From Netflix and Amazon Prime Video to all the catch-up services like BBC iPlayer and Channel 4’s All4, appointment TV is now very much at the discretion of the viewer.
The overnight (ie “live”) ratings for almost every TV show pinpoint how central streaming has become. Eastenders, for example, regularly got 10–12m viewers in 2010 but by 2018 only gets 5–6m and similar patterns can be seen for almost all TV shows. There is more choice and less need to make “appointment” TV decisions.
Plus there are multiple devices – even our simplified buyer might have an iPhone, an iPad, a laptop, a Smart TV and a set top box of some kind. Now add spouses and kids. And the key to this is robust high speed connectivity.
It isn’t wise to assume that metropolitan areas will all be kitted out with the fastest and most modern infrastructure. Utility companies are conservative and roll-out is based on deep demographic information that lets them estimate real demand.
Is this important? One way to answer that could be to see whether transaction levels have held up better in areas where more properties have access to ultra-fast broadband.
A quick analysis shows that, of all the Local Authorities or Unitary Authorities where transaction levels have increased this year (January to July 2018 vs January to July 2017), on average, 49% of properties have access to Ultra-fast broadband with an average download speed of 46.4 mbps. However, those places where transactions have fallen have, on average 32% of premises with access to ultra-fast broadband and an average broadband speed of 42.9 mbps.
In other words, housing markets that have been more resilient over the past year or two, also seem to have higher proportions of homes with Ultra Fast Broadband.
So, interested to know how Cardiff stacks up?
Cardiff has an average broadband speed of 58 MBPS and 56.8% of homes in Cardiff have access to Ultra Fast Broadband (300 MBPS+)
While the average for Wales is just 31 MBPS and only 16.6% have access to ultra fast broadband.
These days one of the more common questions being asked to myself and staff with both our sales and rental properties is “What are the broadband speeds here?” This question is now asked more times than “what are the local amenities like?” With the future now adding more and more online attractions to its growing list you would be unwise to underestimate this modern demand.
This data is tantalising and I think it shows that saying “This property benefits from BT Broadband” is no longer enough for modern buyer / renter…
Working with property professionals for over 20 years providing advice and services to all property investors.