To many in the property industry, the immediate results of these trends were self-evident. Indeed, much has been made of the ‘race for space’, with the newfound freedom to work from home undoubtedly fuelling buyers’ preferences for more spacious properties outside urban centres.
A recent survey found that 60% of Britain’s workforce worked remotely during the first lockdown, highlighting the breadth of the change in the relationship people had with their homes.
But what started as a temporary solution to an unprecedented global crisis, has led to a permanent shift in work dynamics, with companies increasingly leaning in towards hybrid and flexible work patterns. A separate study found that two-fifths of British workers never intend to return to working in an office.
Now, as the pandemic ebbs and we look ahead to a return to normality, we arrive at the opportune moment to reflect on how the property market has been influenced by home working. The benefits of successfully implemented remote working to both employer and worker are well-established, but the question remains how real estate will adapt to this new normality.
Homebuyers’ changing preferences
Such a radical change in how buyers perceive value in property will naturally influence where demand flows. Identifying these emerging demand patterns will be critical to finding success in the market ahead of settling into an equilibrium.
FJP Investment recently commissioned a series of independent market research to examine how remote working has influenced homeowner preferences. The research suggests that homeowners across the UK are rethinking what they want and need from the place they live, with people’s social and professional priorities shifting markedly over the past two years.
The study revealed that 23% of homeowners said the rise of homeworking had made them reconsider their priorities for future property purchases, including 44% of the youngest cohort surveyed. Further, having available space for a dedicated home office has risen in importance for 27% of homeowners.
The data suggests that buyers continue to be drawn towards properties benefitting from greater indoor and outdoor space, with access to a private garden or outdoor space moving up the priority checklist for 44% of respondents. The square footage of a property has also become more important for over a quarter (26%) of homebuyers.
Evidently, the advent of remote working has had a tangible impact in what type of residential properties buyers – particularly younger ones – are looking to invest in. Looking ahead, homebuyers’ changing imperatives are likely to accelerate developer innovation.
Renovate and innovate
This established shift in demand presents opportunities for investors and developers alike, with vast numbers of abandoned and derelict properties in the UK ripe for renovation. A recent study showed there are over 280,000 empty houses in the UK, highlighting an opportunity to capitalise on low stock and high demand, by renovating and re-purposing unused properties.
The evolving location preferences of homebuyers could also present diversification and innovation opportunities in the market. FJP Investment's recent research found that 17% of homeowners are now more inclined to live in a different part of the UK. More plurality on the demand side of the market means a greater volume of opportunities for investors to attract buyers.
In turn, increased remote working patterns will naturally have consequences for the demand and supply of commercial property. From the ashes of abandoned and unprofitable office buildings could rise re-purposed residential properties, fitted to the evolving needs of urban working professionals.
As the most restrictive days of the pandemic recede into memory, now is the time for property investors and the real estate sector as a whole to anticipate the changing dynamics of the working from home revolution, and how it will influence people’s relationship with their homes and physical workplaces. Clear opportunities are emerging that should be harnessed to build future-facing homes that will suit the evolving requirements and preferences of remote workers, as the dust settles on a new kind of buying market.
