Will Lockdown Have a Lasting Effect on Property Investing?
Due to the coronavirus lockdown many of us have had to learn how to work efficiently from home. This is a method to slow down the spread of the virus and early signs show that it is working and will hopefully shorten the overall time we will have to spend in self-isolation. Over the last month or so the number of people that work from home at some point has more than doubled according to the ONS. Many publications have been claiming that this may end up being a more permanent change as this was already a trend with many employers that has only been accelerated by the current situation.
So, we wanted to consider the effects this would have on property and the likelihood that this will happen.
Companies will only make this a permanent change if it benefits their business so let’s go over the positive and negative effects that working from home has. Studies have shown in this short amount of time employers and employees have coped well with the transition, with around 70% of people on both sides stating their productivity has not been negatively affected. Workplace flexibility is seen by many employees to be an attractive trait in an employer. This is because it allows people added freedoms in their personal lives for example it can cut down on commutes and makes childcare easier. Employers can get access to a wider range of staff as location becomes less of an issue. Firms may also appreciate not having to spend as much money on expensive city office space.
In terms of negatives, there are a few. The first is that it isn’t possible for all jobs, while the internet is a pretty useful tool, it can’t work miracles and many activities can only be done in the real world. Connectivity is an obvious roadblock, but with many software developments (we’re sure you have become better acquainted with some of them, like Zoom, over the last few weeks) have been made available to keep colleagues in contact. There has also been much debate over the effect on people’s mental wellbeing as being cooped up in one place has been shown to have detrimental effects. If this is the case then employers will have to take measures to ensure their employees remain healthy.
Next let’s look at effects on property investing. If this does end up occurring we could see a shift in demand away from city centres. This will depend on your target tenants. We might also have to focus on different local amenities than we normally would when assessing demand. With less commuters, parking and nearby stations will become less important. Quality local broadband providers and the availability of fibre networks will be a big draw for any potential remote-working tenant. Extra space for home offices may also end up being a important features of a let. The age distribution of people working from home is skewed older so making these changes may be more worthwhile for family lets or older professionals.
Although we all might be feeling slightly stir-crazy while stuck inside, this may be a more common working environment. There are a number of both advantages and disadvantages but even if this is only partly implemented it could have significant effects on demand. Currently, this is very much a hypothetical situation as the end of quarantine is still some ways off and by that point we may all have collectively decided we never want to stay inside again. However, some of the biggest companies such as Microsoft have started making changes to their IT structure and enquiries for computers and broadband have increased in this period. These all suggest that for many this is a permanent change rather than a temporary solution. As always we have listed the references below, all of which have further information on the topic of remote working, so give them a read.