In the wake of Covid–19 working from home has increased dramatically with around half of adults now working from home. This compares with just 5.1% of employees working primarily from home in 2019 (Source : Office for National Statistics). This seems set to continue. Barclays CEO Jes Staley commented “the notion of putting 7000 people in one office building may be a thing of the past “.
Working from home has started to influence the housing market. A recent report from estate agents and property consultants Carter Jonas noted that there has been an increase in enquiries from people wanting additional space or a dedicated areas for a permanent home office space. They also report a growing demand for outdoor space and a desire to move out of cities and away from commuter hotspots.
Rightmove and estate agents Strutt and Parker have also reported that buyers are keen to move to coastal or country areas and Andrew McKnight who owns MAP estate agents in Cornwall has spoken to people who are considering moving out of cities now that they can work from home. However he commented “we will have to wait and see if this is short term trend or the start of a change in buyer behaviour”.
The trend towards working from home, thereby giving people the choice of moving out of cities runs counter to large scale development of housing in city centres in the last two decades. This was facilitated by the “sequential test” in planning policy that gave a preference to building new housing on previously occupied “brownfield” sites.
City centre developments are typically on waterfront regeneration sites with a wide choice of facilities for leisure activities and the “buzz” of a city lifestyle. Will that continue on the same scale now that more people want to work from home and move to a quiet location? Again it depends if those aspirations turn into a reality.
How will all of these changes to working life affect the BTL market?
A well designed home office is going to be essential for many tenants and a google search of home office designers provides evidence of a burgeoning market and plenty of choice.
There is clearly a growing demand for housing with outside space in a quiet location and houses with gardens have always attracted a premium price. BTL investors will be competing with home buyers who want to move to a quiet location but the coming recession may force sellers into accepting low offers and it may be worth looking for a bargain, possibly a property in need of renovation in a rural area.
There is growing interest in moving out of cities and if that does happen on any scale in the long run there will be less demand for city centre housing with a downward pressure on rents and house prices. However this may be marginal and it is more likely that there will be a significant uplift in country areas.
For BTL investors is this the time to be looking at houses is the suburbs with a garden for new investment?
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK in the light of Covid-19 at our next PIM.
We’ll be arranging this when safe and practical to do so.
Meanwhile, stay safe.