Impact of WFH trends on housing market

HangTime

HangTime

HangTime

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Curious as to what people think may happen with the housing market given the increasing trends towards people working from home. Currently there is a strong bias towards the commuter belt i.e. homes that give quick access to traditional employment hubs (e.g. City of London, Canary Wharf) that drives up prices because of the demand from city workers on relatively high income. A few years ago I was seriously considering moving nearer to London with commute being the only driver really. It never happened but since then I periodically fantasise about it (lots of window shopping on Rightmove, researching locations etc), but now I think I'd be content to stay where I am (to provide stability for young children etc).

Looking ahead we are seeing organisations taking a stock check around working practices as a result of the enforced WFH that came about due to the pandemic. My expectation is that (in some sectors at least) this becomes a long-term trend whereby it is no longer expected that employees are in the office 4-5 days a week. As a consequence the benefit from living somewhere with rapid access (e.g. near a mainline train statiton) to such working hubs is reduced.

What I'm not so sure about is how these changing patterns will impact on the housing market. I would expect it to mean more people prepared to compromise on commute (because they do it less frequently) and thus reduce the imbalance in house prices by location - i.e. increase demand in areas where housing is cheaper because those who previously ruled those areas out for being too far from the office may now consider them. So for example some people might be unhappy with a one-way commute of over 2 hours but if they only do it once or twice a week maybe they would put up with that to secure a bigger house in a nicer area in proximity to good schools, green spaces etc. Also it might reduce the premium on properties near a train station (although this clearly won't be eliminated as it is still desirable to a lot of people). However I would not expect this to happen rapidly, more of a gradual change with London still being a desirable and hence expensive place to live near for other reasons.

In essence I think 'nice places to live that aren't near major employment centres' become a lot more appealing and could start to see a bit of a boon as some people flock there to get the quality of life (outside work) they crave. What do you think?

I guess there's then some other factors like people wanting more space at home so they can setup home offices etc, but that's more of a universal trend that something that could vary by region.

Finally there are some Covid-19 factors that influence this (e.g. viability of public transport) but really for this thread I'm thinking more longer term on the assumption that restrictions are relaxed and things return more to 'normal' at some point.
 
I've thought about this a lot. We bought a few years ago in Wallington which is a small town in Greater London between Croydon and Sutton. We certainly paid a premium for the property we are in given its proximity to London.

Long term I think we will still be working in London but our proximity might not need to be as close. That said - if we did move anywhere it'd be further south and I don't think the trade up in house size would make up for the additional length in commute we'd have to make (even if it was only once or twice a week). Additionally I like having London so close and some of the state schools here are some of the best in the country.

At the moment we do need to size up our house but can't afford the next decent rung up on the ladder here so will likely have a loft conversion done. I think you are right in your analysis though. I think some of the areas up North where property is still comparatively cheap will do well.
 
The rise of the home office is upon us, and the decline of office space and office space landlords. I can see Office space landlords losing a lot of income and going bust when the organisations renting from them decide to free up cash when the lease expires due to more people working from home.

Maybe lots will be converted to flats in the future.

Personally I'm looking upward, toward the loft space to be exact. Fancy myself an office loft conversion with air con and a much bigger desk.
 
My situation mirrors your own, Hangtime. I live quite a way from the city out in Oxfordshire and my commute had become such a grind that it really was playing on me a lot.

Due to how much better it is out here than nearer town, we still didn't decide to move down (and rather, we decided to move and upsize within our locality) but this situation and the hope that employers trend as you suggest, has firmly cemented the idea now that we made the right decision.
 
Interesting, I hadn't really thought about this. I live on the middle of nowhere, it's nice, I wouldn't want to live in a city although I grew up in London.

Houses here a cheap also, interesting to see, from a selfish point of view I can't see any harm really all it would do would increase the equity in our house.
 
The company I work for has 2 empty offices to let out at the moment and they have been on the market well before brexit, Good chance they will stay empty for a while. I think we will see smaller office spaces with people working from home 1-2 days a week.
 
WFH is one of the main things I'm hoping persists after this is all over. I'm hoping to buy soon and more WFH option in the job market would make me more comfortable moving out of the city. I could afford a much larger house in more preferable surroundings. I doubt it'll have a noticable impact on house prices though.
 
The pandemic has brought with it essentially a massive world wide, work from home beta test. I think its actually worked out fairly well. I do not think we would have ever had 70+ people on a teams call before even as a test but the pandemic forced everyone to buy into it. I think companies are already asking questions of how they can support people to continue to work from home. We have employees that had permanent desks at our HQ that have been successfully working from home during the period, so what is the business need for them to return? if they can continue to work from home why not support them to do it.

The days of the large corporate offices are numbered I feel, we do not need them anymore. Smaller satellite offices with printing facilities and perhaps small meeting rooms will be the way forward, think Uber for office space where you pay a monthly fee to access much perhaps like a gym membership. So, you need access for these 8 employees, OK that`s great that will be £40 a month each and that includes access to the meeting room for a 48 hour period every 28 days. You can come and go as you please for that month and use pay as you go for additional meeting space should that be required.

I think the housing market will see a downward tend overall, this will be because with less people using the large centralized office space the cost of land will drop which means house prices fall when land is cheaper. Do you know what I think the biggest driver to house sales will be going forward? Internet and how good it is, that and the extra space for a home office. Why would you buy a 2 bedroom flat for £300k in a central location when you can get a nice 5 bedroom house further out for similar money, with a nice home office and decent fast broadband, after all you only need to commute to the office once or twice a week perhaps while you get used to working with everyone and once you are settled that can drop down to monthly face to face team meetings. Friends of mine have told me they have an extra 10 hours a week of free time since the lockdown because they are not commuting who isn't going to be happy with that?
 
Yes the above largely echoes my thoughts, my employer wouldn't have been brave enough to go all-in on WFH but because their hand was forced (to be fair, they brought it in themselves a week before lockdown was announced) and it has proven to be reasonably effective, it's an avenue being investigated.

In terms of flexible office space, places like WeWork were already doing a land-grab over the past couple of years although I seem to recall they were making pretty heavy losses. Will be interesting to see how this develops.

One area I'm less sure about is internet driving house sales; I think of it is a hygiene factor i.e. you need it to be 'good enough' but there are quite diminishing returns beyond that point. Things have improved a lot over the past decade to the extent that the vast majority of homes already have access to reasonable broadband, and we already have a USO in place that I think allows you to demand 10mbit download / 1mbit upload which should be fine for virtual desktop environments and is capable of video conferencing (albeit your upload means your quality won't be perfect). Whether you have 50mbit or 500mbit really doesn't make much difference. I would argue that Internet service is much less of a differentiator compared to commute times (e.g. proximity to railway links) has historically been, because the majority of homes can get decent internet whereas the majority of homes do not have good commuting times. Yes you'll get a handful of 'not-spots' that might suffer but I see that more of a case of say 5% of homes suffering downward pressure on prices due to rubbish internet compared to the traditional model where a small proportion of homes are desirable due to their good commuter links.

I'm saving about 18hrs/week on commute time at the moment. Ironically that actually makes work more hectic because I'm no longer working on the train; I used to do about 3hrs work a day whilst commuting. So whilst my productivity during working hours hasn't been impacted much, my overall productivity has as I'm not top-and-tailing the working day with much extra working. That actually raises an interesting point about whether in future commuting time will start to be considered as working time for some places (e.g. say you normally work 9-5 from home but then a few days a month you commute into a central hub, rather than being expected to turn up at 9am maybe it could be later than that).
 
The pay as you go office already exists, as well as smaller office teams sharing space, or taking a room in a building with shared meeting rooms, break rooms etc.

One article, cant remember where, said searches for 1bedroom CC flats had dramatically dropped while two bed terrace with garden had dramatically surged something like 200% or more.

Articles for my local market solictors and estate agents seem to think that Edinburgh prices and demand may remain constant/steady while demand for the commuter towns will actually drop as they've typically been compramises between travel and size and "country feel" and those seeking the later not so much concerned about travel will push beyond the commuter towns pushing those villages up and flattening off the rising commuter town price.
 
Ekim said:
I've thought about this a lot. We bought a few years ago in Wallington which is a small town in Greater London between Croydon and Sutton. We certainly paid a premium for the property we are in given its proximity to London.

Long term I think we will still be working in London but our proximity might not need to be as close. That said - if we did move anywhere it'd be further south and I don't think the trade up in house size would make up for the additional length in commute we'd have to make (even if it was only once or twice a week). Additionally I like having London so close and some of the state schools here are some of the best in the country.

At the moment we do need to size up our house but can't afford the next decent rung up on the ladder here so will likely have a loft conversion done. I think you are right in your analysis though. I think some of the areas up North where property is still comparatively cheap will do well.
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Fellow wallington-er! We get off quite well in terms of price around here considering the distance and transport to London. I think more folks will move out to this ring (zone5/6) around London. A bit longer commute but a bit less days in the office to save some cash and get a less metropolitan vibe.
 
I imagine the demand for places on the coast/other beauty spots may well increase rapidly and if anything it could be a big boost for places which are usually only seasonal like Cornwall where they get an influx of permenent residents rather than just holiday lettings. Providing they can improve infrastructure.
 
We are definitely considering moving out from zone 4 London (Bromley). We're probably going to be working from home 3-5 days a week so commute just isn't really a concern any more within reason. If we stay in Kent but further out from London we can get about twice the house for the same money, so it's almost a no brainer. The only downsides really would be less access to shops/restaurants/bars etc.
 
happy_2008 said:
To be fair though you shouldn't really be working on public transport mainly due to DPA
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Depends on what you are doing surely? If you are sat looking at personal / sensitive data with someone in the adjacent seat peering over your shoulder I can see a risk, but reviewing a document or preparing some slides or whatever around generic content can't be that big an issue.

ergonomics said:
Fellow wallington-er! We get off quite well in terms of price around here considering the distance and transport to London. I think more folks will move out to this ring (zone5/6) around London. A bit longer commute but a bit less days in the office to save some cash and get a less metropolitan vibe.
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This was one area I considered in my window shopping a few years ago, around Carshalton Beeches etc, but in the end I was a bit worried about proximity to Croydon (crime etc) and not ideal for visiting family compared to locations further west. Also whilst reasonably priced compared to some other areas in Greater London it was still towards top end of budget. Definitely works from a commuting POV though, I could halve my commute with a house fairly near the station there.

Marvt74 said:
I imagine the demand for places on the coast/other beauty spots may well increase rapidly and if anything it could be a big boost for places which are usually only seasonal like Cornwall where they get an influx of permenent residents rather than just holiday lettings. Providing they can improve infrastructure.
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I'm led to believe Cornwall has excellent broadband (one of the first areas to really push a fibre rollout) so certainly should be feasible, but I guess it depends how much travel people need to do.
 
Relentless81 said:
The rise of the home office is upon us, and the decline of office space and office space landlords. I can see Office space landlords losing a lot of income and going bust when the organisations renting from them decide to free up cash when the lease expires due to more people working from home.

Maybe lots will be converted to flats in the future.

Personally I'm looking upward, toward the loft space to be exact. Fancy myself an office loft conversion with air con and a much bigger desk.
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I worked for a people heavy organisation with so much office space.

They are genuinely thinking they can abandon one of the offices.
Can't imagine anyone wanting to fill that due to the location and size (hundreds of people, and a whole floor of meeting rooms too.

I think covid might reduce house and particularly flat price in inflated city areas as more people can now get some space further out as weekly commuting time falls due to WFH
 
Yep - another option I had given consideration was buying a two bedroom flat in London so I could rent one room out and use the other as a pied-a-terre for a few days a week. But it was hard to find someejrtr nice in an area that wasn't a ****hole for a reasonable price and definitely don't see the appeal now.

I guess ironically we might see an influx of people into more central areas if there is some office space converted to flats and prices fall a bit, making it more affordable for the people that do need to be in city centre for work.
 
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