The working patterns of a huge number of people changed during the Covid pandemic, creating a sudden shift in housing preferences. But does working from home still have an impact?
From the summer of 2020, when the UK housing market reopened after several months of lockdown, there was a frenzy of appetite and market activity that pushed mortgage approvals to their highest level since October 2007.
This was the start of a UK property market boom, with surging prices spurred on by the government’s temporary stamp duty cut, as well as the cheap mortgage rates that were available at the time.
It also marked a huge change in what people were looking for in their homes – including both homeowners and tenants – with a newfound “race for space” being entered into, particularly by those living in small flats in inner cities. As well as lockdowns causing people to reassess their priorities in life, for many, having a space for working from home became crucial for the first time.
With offices across the country remaining closed for many months, working from home became the norm for thousands of workers who were able to do so. Even once things began to get back to “normal”, many workers have continued to spend at least part of the week working from home, known as hybrid working.
Working from home and property choices
As the years have gone by since the height of the pandemic in 2020, new factors have come into play that have arguably reversed much of this race for space. Those who upsized and stretched themselves financially for a larger house in the country, for example, may now find their mortgage payments are considerably higher than anticipated.
The cost of living crisis and rising energy bills have also played a big role in peoples’ property choices, in some way overriding the appeal of working from home. Larger properties tend to have bigger bills, and there has been a definite trend towards people favouring smaller, more energy efficient properties.
This can be seen when looking at how much prices have risen for flats in many parts of the country; a rise that has largely outpaced price rises for larger houses.
The number of people working from home full-time has also declined drastically from its peak, as would be expected. Figures from a survey done earlier this year by the Office for National Statistics (ONS) found that 73% of British workers had travelled to work in the past week.
Do home-workers need a home office?
In a survey conducted by the ONS looking at working patterns between 27 April and 8 May 2022, 14% of people said they were working from home exclusively, while 24% worked on a hybrid basis – partly at home and partly in their place of work.
This figure rises when looking specifically at higher earners: 38% of workers who earn £40,000 or more worked on a hybrid basis during the timeframe, but this fell to just 8% of those earning a salary of up to £15,000.
So rather than working from home exclusively, it seems that a higher number of people are partly home-based and partly office-based; and this is likely to have an impact on their property choices once more, from the physical space they have available in their home, to its location and proximity to a place of work or transport options.
One recent study from Currys found that the highest percentage of people who regularly work from home work in their home office, making up 28% of respondents. A further 27% work in their living room, while 17% work in their bedroom. This demonstrates that while a dedicated space may be important for some, it is not necessarily seen as essential, particularly for hybrid workers.
For the country’s private rented tenants, new working patterns could also contribute to the increase in interest in the build to rent sector. These are properties lived in exclusively by renters, that tend to be higher spec than traditional rentals and often come with dedicated shared workspaces for tenants who are working from home.