Back in 2020, a significant number of us were abandoning our cities and heading to the countryside, declaring the commute was over and that working from Home (WFH) would be the new normal. So, were they right? And what effect will it all have on the property market and the choices we make about where we live?
It was only in January 2022 when the Government’s working from home guidance was lifted that we began to get an idea about what the future might look like. Initially, there was no rush back to work - many of us had grown used to WFH and were enjoying the more relaxed way of life, as well as the savings, which were typically around £300 per week (considerably more for those with longer commutes and childcare costs). However, the Government and the City had other ideas - both launching back to work campaigns, with civil servants a particular target for No.10. Although the tech and smaller business sectors have mostly taken a more flexible approach, commuter numbers have since been steadily rising. And look likely to continue doing so.
The latest figures show that London’s offices are now at around 66% of their usual capacity, but only on Thursdays! The numbers hold up reasonably well on Tuesdays and Wednesdays, but on Mondays (40%) and Fridays (20%), they are substantially down - part of an emerging trend for three days a week at the office*. Clearly, there is still a way to go before we hit pre-Covid commuter levels. However, with resentment reportedly growing towards those who have been allowed to continue working from home and fears that those with face-to-face contact in the workplace will have an advantage, the drift back to work is likely to continue building momentum.
All these changes in our working practices are having a very real impact on the housing market. At the height of the pandemic and the race-for-space, demand for inner-city property plunged, especially for apartments. In contrast, in the countryside demand was so high that in areas like Devon and Cornwall, people were buying properties unseen. In spring last year, prices in the Southwest were rising by 9.2% on an annual basis. In London, they had just about clawed their way back into positive territory (0.2%).
Now, in what has been dubbed the ‘Boomerang Effect’, that process is beginning to go into reverse. London’s property market is recovering, up 6.3% since last year, and is slowly closing the gap on the Southwest, up 14.5%**. In the rental market, which tends to react more rapidly, the changes have been even more dramatic. During much of 2020, London’s rents were falling. They only started recovering midway through 2021. Now they are up by 11.6% year-on-year, with many of the capital’s tenants, like buyers in the Southwest, having to secure new homes without seeing them***.
For those people living in our areas, Wokingham, Binfield, Jennett’s Park, Warfield, and Bracknell, they will be feeling pretty pleased right now, as they have ended up with the best of both worlds –sustainable price rises, relatively short commutes, and plenty of outside space.
To conclude, despite our ongoing return to work, it may take several years before we fully go back to normal, and all the effects of the pandemic begin to fade. And it may well be the case our preferences for outside space and some kind of home office remain. What is far clearer, though, is that WFH is proving nowhere near as permanent as many had first thought.
If you’re one of those looking for a property with plenty of space and an easy commute, we have lots that will fit the bill, just give us a call at Sears and we can point you in the right direction.
*Office data: Freespace Index **House price data: Rightmove ***Rental data: Homelet