Working from home has come of age
Working from home this time its different
The first digital shift happened just over 20 years ago with the dot com boom, which left the built environment behind. You couldn't buy a house on-line, you couldn’t sell a house on-line and you certainly couldn’t live on-line. Back in the 20th Century ‘working from home’ was viewed as code for ‘a sneaky day off’. But this time it's different. The second digital shift has changed what can and cannot be done from home.
COVID-19 + Broadband = Working from home
Lockdown gave many employers a stark choice, allow staff to work from home or no work gets done. Staff worked from home and guess what, what was done. The link between ‘working from home’ and ‘having a day off’ was finally broken.
How many people are working from home?
In April 2020 the ONS reported that 46.6% of people in employment did some work from home, and of those that did 86% did so because of the COVID-19 pandemic.
Perhaps the best illustration of the ‘Great shift’ was that more than half of people living in London (57.2%) did some work from home.
London is the biggest city in the country with the highest house prices and the biggest commuter belt. For many, their job location dictates their living location and many are living where they are out of necessity rather than out of choice. This is a phenomenon that is replicated time and time again across the country.
Constrained by COVID but not by the commute
For many, the COVID-19 pandemic led to a Working from Home epiphany – “I can now live where I want to live, I am no constrained by the commute, I can buy a bigger home outside of the commuter belt.”
The constraint now is not commuting times, but broadband speeds. Suddenly the end is in sight for the painful commute and a huge weight has been lifted and a lot of time saved.
House prices and housing transactions rising
Since the start of lockdown working from home has moved from the niche to the mainstream. This is leading to a huge shift in how and where we live. Housing transactions have bounced back to where they were pre-COVID and not many sectors can report that! House prices continue to rise despite the pandemic, recession and economic uncertainty. For housing at least the Great Shift has trumped the pandemic.
So far a V-shaped housing market recovery
A house purchase is a very big-ticket item and a very big decision. During the Credit Crunch, housing transactions fell a long way and took years to recover – it looked more like the grand-canyon than a ‘U’ shaped recovery. For housing at least the great shift has, so far, led to a ‘V’ shaped recovery and the momentum behind the shift rein behaviour suggests to me that the shift is permanent. So great is the shift that we are referring to it as the ‘Informational Revolution’ and will be similar in scale to the ‘Industrial Revolution’ that went before it.
The great shift has huge implications for future house prices
The implications for the housing market are huge. If current trends play out house prices in urban centres will fall and homes suitable for working from home and those with outside space will rise. We would hope that the great shift leads to a rebalancing of the economy, one where wealth is more evenly distributed across the country. Ironically the COVID-19 pandemic may do more to rebalance the economy than any Government policy has been able to.