Samsung Research Shows Consumers Will Pay Extra 7.7% Premium For Smart Homes

This is £21,774 more than the average UK house price, a nearly £4,000 increase from 2023 survey

Key Insights from the SHBI: 

• 79% of people looking to move (rent or buy) homes in the next five years want a smart home
• They’re willing to pay a premium of 7.7% on the average UK house price, a value of around £21,774
• 70% of survey respondents want to improve energy efficiency with smart technology and 63% want to save money. A further 75% want technology that will improve security
• Demographics are changing—48% of Gen Z want a smart home, but the number of over 65s looking for a smart home is increasing, a trend that we expect to continue

LONDON, U.K – June 27^th 2024 – Samsung Electronics Co., Ltd. Today, Samsung has released the latest data from its Smart Home Buyers Index 2024 (SHBI)^[1].

The SHBI demonstrates the strength of the market opportunity for developers and homebuilders, with an overwhelming 79% of people surveyed saying that they want a smart home^[2]. What’s more, they’re willing to pay an average premium of 7.7% on the average UK house price of £282,776, a value of around £21,774^[3]. With the smart home market predicted to show a compound annual growth rate of 11.66% between 2024 and 2028 and generate projected revenues of approximately £8.6bn in 2024 alone^[4], it’s clear that this movement is only gathering pace.

Financial concerns were chief among those looking for a smart home. In addition to the 63% of people who wanted cost savings through technology, around 70% of respondents highlighted energy efficiency as a key motivation in using smart technology, with 84% wanting to save money on their energy bills. This interest in energy-efficient devices and appliances was supported by Samsung’s analysis of search volumes, where searches for smart energy appliances rose nearly 60% from April 2023 to April 2024, led by air source heat pumps. Search volumes for air source heat pumps increased 173% year on year, overtaking searches for smart meters.

The focus on energy efficiency should be welcome news for an industry that is gearing up for the current UK Government’s Future Homes and Buildings Standards, which requires that new homes built from 2025 produce 75% to 80% less carbon than homes delivered under previous regulations. This comes into effect in 2025 and those homebuilders and developers that incorporate the appropriate future-proofed technologies, can support people in their quest for energy efficiencies and cost savings in the future, particularly as newer technologies become available.

Mark Seaman, Head of Samsung B2B Integrated Offering Team commented: “Samsung’s Smart Home Buyers Index uncovers the key consumer priorities for smart homes. We are a key partner for developers and homebuilders, guiding them as they deliver innovation and smarter living solutions. Through providing insights such as this, Samsung can help ensure the industry is keeping pace with changing consumer demands. The data shows that understanding the importance consumers place on smart homes will increase the value of rental and sale prices to help drive return on investment for homebuilders and developers.”

However, consumers’ finances should not be the only consideration when designing homes. After energy efficiency and cost savings, home security was the biggest reason people were looking to integrate smart technology, with 75% of people wanting peace of mind and to safeguard their homes with connected security features such as doorbells or cameras. Building connectivity into homes will allow for secure networks that are accessible from phones and other devices, enhancing a feeling of security and control.

The SHBI has also highlighted trends across age demographics. Smart homes are not just for young people. There has been an increase in the number of people more than 65 years old, who want to take advantage of smart technology in their homes. It’s therefore important that the industry doesn’t solely consider the technology needs of younger generations but are prepared to cater across demographics. This is particularly noteworthy with the older UK population^[5] expected to grow to around 26% by 2066^[6].

The UK construction industry is expecting new work output to grow by 21% during the five years from 2024 to 2029^[7]. Those responsible for new construction projects would do well to take heed of the SHBI’s insight that technology is a key reason people want to move into new builds. The survey found 80% of people finding such homes attractive, with 36% citing the amount of smart technology that is pre-fitted as the main reason. A further 53% believe new developments are designed for modern life, likely including technology capabilities, whereas 57% returned to energy efficiency as their motivation to move into new developments. When asked specifically about new builds, 40% of people aged over 65 thought that pre-fitted technology would motivate them to move into one, again demonstrating the importance of integrating technology in all types of homes, including retirement properties.

Mark continued, “It’s critical that homes can support ongoing technology development and adapt to the ever-evolving landscape for smart devices and appliances. The sole focus shouldn’t be on providing technology for the short-term but on ensuring that homes are future-proofed. With 61% of our survey respondents saying they expect AI to become more important to them in the coming years, even if they’re not using it now, it’s clear today’s consumers are increasingly aware of its potential.

“Recent years have seen significant focus on the UK housing market, and the cost-of-living crisis, rising inflation and uncertain energy prices have also been top of many people’s agendas. There is a real opportunity for developers and homebuilders to engage the right partners and integrate technology from the outset, taking a digital-first approach when building the homes of tomorrow, today.”

TO DOWNLOAD THE SMART HOME BUYERS INDEX, PLEASE CLICK HERE

[1] The SHBI provides an in-depth picture of key consumer trends regarding smart technology in the home. The Index is based on a bespoke survey of more than 1,000 consumers looking to move (buy or rent) homes in the next five years, combined with analysis of search volumes for smart devices and appliances from April 2023 to April 2024.

[2] Defined as a ‘home equipped with lighting, heating, and electronic devices that can be controlled remotely by smartphone or computer’.

[3] Data taken from UK House Price Index as of May 2024 – https://landregistry.data.gov.uk/app/ukhpi/

[4] Data taken from Statista Market Insights: https://www.statista.com/outlook/dmo/smart-home/united-kingdom

[5] Data taken from the Centre for Ageing Better – The State of Aging 2023 – 2024

[6] Data taken from the Office for National Statistics – Living longer (ons.gov.uk)

[7] BCIS Building Forecast – Construction Industry Forecast | BCIS