In the UK, 76% of top landlords and property investors are integrating technology into their business plans. This includes the development of smart buildings. From a simple smart meter to NFC-entry systems, these tech-enabled properties enhance the living and working experience for occupiers and bring a fleet of sustainable benefits.
How, though, is smart building connectivity changing the UK property market? Take a closer look in this guide.
What Is Smart Building Connectivity?
Smart buildings are domestic and commercial buildings that utilise technology for specific purposes. For example, a smart building might have:
- Motion-activated lighting
- Automated heating and cooling systems.
- Voice-controlled appliances.
- Keyless entry and biometric security systems.
According to ITVET, smart buildings and IoT connectivity services incorporate technology to “improve operational efficiencies and enhance the tenant experience.” This applies to both domestic and commercial buildings.
When talking about smart building connectivity, we’re referring to how different technologies within the space work together. The Internet of Things (IOT), for instance, is a system frequently seen within smart buildings in which a network of physical sensors and devices connect via the internet.
A common example of smart building connectivity is seen when using smart speakers. From Amazon’s Alexa to Google’s Nest, these speakers can connect with other technology around the property, like lighting and your smartphone, to carry out tasks when instructed.
Smart Building Connectivity and the Property Market
In the UK, the smart building market is experiencing a boom, with a compound annual growth rate (CAGR) of 26.6% between 2024 and 2030. There are numerous examples of smart buildings already popping up around the country, too, like Space House and The Crystal, both of which are found in London.
This sudden spike in tech-driven properties is causing shifts in the wider property market. To learn more about the future of domestic and commercial property, let’s take a look at exactly how smart building connectivity is making waves.
Increasing Demand
The rise of smart buildings and the corresponding demand for tech-ready spaces have gone hand-in-hand. Occupiers are increasingly prioritising buildings with integrated tech (like high-speed connectivity, IoT devices, and automation) when searching for a property.
For example, a survey of UK citizens who want to rent or buy a home in the next 5 years found that 86% would consider buying a smart home. Interestingly, 71% also stated that energy efficiency was a driving factor in this choice.
Rising demand is also clear when looking at the uptake of smart household technology. In the UK, for instance, over 30% of households are already integrating smart products into their homes, with the figure expected to rise to over 50% by 2027.
Higher property prices
As is so often the case, with an increase in demand comes an increase in cost. House hunters are willing to spend 6.5% more for a fully equipped smart home.
This would add over £18,000 to an average house price of £285,000. It’s key to note, though, that 81% also want their new smart home to integrate with their existing devices, highlighting the importance of smart building connectivity.
In terms of the wider property market, this creates an additional incentive for homeowners and landlords to upgrade their space. If they’re able to generate a positive return on investment (ROI) by integrating smart building connectivity, it becomes a strategic investment.
Pursuing Net-Zero Targets
Smart building connectivity can be integral to net-zero plans for businesses. Over 50% of the world’s largest 2,000 companies are committed to net-zero, and smart buildings are an excellent way to prove that eco-friendly aims aren’t solely for marketing.
These businesses are particularly likely to focus on sustainable features within smart buildings. This might include renewable energy sources, smart water management systems (such as rainwater harvesting), and technology that monitors and improves indoor air quality.
Smart building connectivity also helps businesses collect, monitor, and use valuable data to drive sustainable initiatives. This is essential for carbon reporting.
For instance, British Land, one of the UK’s largest property development and investment companies, uses smart buildings to monitor energy, water, and waste. They use the data to identify areas of significant consumption and create unique net-zero plans tailored to their findings.
Their smart connectivity has also helped place their 100 Liverpool Street site in the top 1% of UK office buildings in terms of sustainability.
With green credentials becoming an increasing focus for many companies, these case studies are likely to boost demand for smart building connectivity in the commercial space.
Tenant Satisfaction
As either a domestic or commercial landlord, tenant satisfaction is vital. The happier your tenants are with the building and services you provide, the longer they’re likely to stay.
Smart buildings provide numerous ways to increase tenant satisfaction.
Energy-efficient technology could help reduce tenants’ energy bills, for instance, while a renewable energy source would allow them to stay clear of the grid completely. Biometric security enhances the safety of a building, while smart speakers add to the convenience and entertainment within the space.
For the rental property market, these features can serve as powerful differentiators in a competitive landscape. Landlords could end up seeing higher retention rates, fewer empty periods, and potentially an increase in their rental income.
Looking to the Future of Smart Buildings
With smart buildings offering a fleet of benefits to landlords, tenants, and homeowners alike, the future looks bright for this booming industry. As we’ve noted above, the market is expected to grow at a super quick rate over the coming years, with a demand for sustainability, efficiency, and convenience driving the uptake.
Affordability and accessibility
As technology develops, smart systems are becoming more affordable and user-friendly. Mass adoption is no longer limited to high-end developments; even mid-range and affordable housing projects are starting to integrate smart features, signalling a move toward mainstream adoption.
UK Net Zero Goals
The UK government is continuing to push sustainable, net-zero goals, too, including within property development. It’s likely that smart buildings will play a significant role in achieving eco-goals, both for the companies creating the homes and the country as a whole, and help monitor and reduce emissions.
Data-Driven Uptake
The data-driven nature of smart building connectivity will also enable quick developments within the smart technology space. As landlords and property managers collect more data, they can use it to make informed decisions, improve tenant satisfaction, predict maintenance, and drive efficiency.
AI Enhancing Smart Building Connectivity
There’s also AI – the biggest disruptor in modern technology. This is set to enhance smart building and unlock better predictive capabilities. For example, systems will soon be able to anticipate usage patterns and adjust HVAC settings in real-time, or even schedule repairs before problems occur, and all without the need for human intervention.
Final Thoughts
There’s no doubt that smart buildings are already shaping the UK property market. With increasing demand and higher price tags providing plenty of incentives for homeowners, landlords, and property managers to jump on board, this isn’t likely to slow any anytime soon.
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