Bringing New-Build Homes up to Speed
The government has announced plans to introduce legislation requiring developers to ensure that new-build properties can support gigabit-speed internet. The impact of Covid-19 has significantly changed the office working landscape. With many workers setting up an office at home, this has highlighted the importance of broadband internet access. Gigabit-speed internet will allow for easier working from home and provide faster, more reliable connections for streaming TV and films.
It is suggested that new homeowners are demanding higher specifications in houses to include "smart" technology covering heating, lighting, and entertainment systems. In addition, the Centre for Economics & Business Research (CEBR) predicts that approximately 25% of the UK workforce, approximately 6 million people, will be working from home on any given day by 2025. No longer is reliable broadband and internet connection a luxury; it is an absolute necessity.
Providing High-Quality Digital Infrastructure
The government's plan is to level up the UK and accelerate the nationwide rollout of world-class broadband with the fastest speeds. Developers will be legally required to install high-quality digital infrastructure from the outset and prioritise as part of the build and ensure that broadband companies are on board before the first brick is laid. Digital Secretary Oliver Dowden said, "This legislation means every new home will be built fit for the future and give people access to world-class broadband speeds from the moment they move in."
There will be a requirement on the developer to provide the connection unless the developer's cost exceeds £2,000, or the internet service provider (ISP) declines to provide a connection. If gigabit broadband exceeds the cost cap, the developer must provide a superfast connection within the same cost cap unless the ISP declines to provide a connection.
The best connectivity will be by ensuring that all new homes will have fibre connections directly to the property. The construction industry has many options for the choice of connectivity to provide, but a 'Fibre To The Premises' (FTTP) connection seems the most attractive. This enables fibre-optic cabling to be deployed to every property within a development, providing gigabit-symmetric connectivity and bandwidth.
FTTP connectivity has previously been more commonly used for higher specification homes. However, it is argued that FTTP should no longer be considered as just a gold standard but that it should be an essential part of all new builds.
Infrastructure Specialists and Fibre Owners
In Sweden, digital infrastructure specialists have long been partnering with fibre owners and operating networks on an 'open access' basis, whereby the digital infrastructure specialist will engage third-party service providers to give services to homeowners/tenants and work closely with a developer or housebuilder to create a bespoke network which can be tailored to its specific needs or circumstances. 'Open Access' typically means the access is given by the developer or the housebuilder to multiple service providers to provide a wholesale service over one physical network infrastructure.
This enables service providers to reach the homeowner or tenant without deploying a new fibre access network themselves. Developers are then free to monetise the resulting service for the benefit of their owners and tenants. All products and services are made available through a web portal via carefully selected service provider partners, making it easy to sell, provide and maintain the network with minimal system administration. This approach has played a key role in enhancing Sweden's gigabit full-fibre connectivity, and over 60% of homes and businesses are fully connected. Some of the advantages of using this model are:
- The only choice for the developer or housebuilder is whether to own and install the fibre, i.e. they can retain ownership of the full-fibre infrastructure and decide on timing and phasing of the physical installation to each property without having to worry about service provision.
- For homeowners or tenants, they can switch providers instantly, try new services as they are developed and enjoy greater transparency into the cost and quality of service provider's offerings.
- The property itself benefits from an increase in marketability and an increase in sale or rental value.
- For developers or estate managers, this brings exceptional operational efficiency and high utilisation of the fibre networks, direct revenue from the fibre asset, which means higher financial returns for the fibre owner (developer or estate manager).
Amending Building Regulations
The government has announced that it will amend building regulations (applicable to England only) to guarantee that all new homes have the right infrastructure to support gigabit broadband and that housing developers must work with network operators to install internet speeds of over 1,000 megabits per second (Mbps) in new-build homes, up to a cost cap of £2,000 per dwelling.
To make sure developers are incentivised to follow the plans, the government has worked with operators to secure significant new commitments that they will contribute to the costs of installing gigabit broadband in new-build homes. Virgin Media will contribute between £500 and £1,000 per home, depending on site size, and Openreach will share part of the total cost up to £3,400 with developers, with the developer share not to exceed £2,000.
The legislation applies to all new residential dwellings, including conversions and self-built homes, but excluding renovated buildings, schools, hotels, and prisons.
It is not yet known when the legislation will come into force, but developers should start planning for its enactment.
Here to Help
If you have any more questions or would like further information on how we can help, you can contact our specialist Commercial Property Team on 0161 941 4000 or email The Commercial Property Team.