COVID-19 has significantly impacted how we work, live and play over recent months. Particularly the work and live elements have converged as people set up offices in the living room. Looking forwards, what legacy might this create on where we live and how we adapt our homes to integrate more home working into our routine?
Different things for different people
Before we think about the role of resi within the new world of work, it’s important to acknowledge that working from home means different things to different people. Some of us may be working from a dedicated office, with two screens and no parental responsibilities, housemates or siblings. Meanwhile others may be hunched over a laptop, in a small flat, competing with a number of other housemates for room on the sofa. Young people form a large proportion of this latter group, with our recent XSF@home™ survey highlighting that 70% of young people are facing significant challenges in working from home. For many, social and professional lives are also intertwined, with working from home removing an important social element of their lives.
Another important acknowledgement is that we all live in our own bubbles and often presume society is just an enlarged version of this bubble. In most cases the bubbles within our industry comprise desk-based workers. The reality is that our bubbles will almost certainly not be reflective of society as a whole, with a recent study by the ONS showing that ‘just’ 49% of the workforce had worked from home in the week to the 14th of June. So, when removing the cannot’s, don’t like to’s & it’s difficult to’s from the economically active population, are we left with a big enough group to influence developers and architects and blow current domestic migratory trends off course?
Time & Space – What’s the damage?
The time and commute costs saved during our recent enforced time away from the office can sometimes be overlooked. With many of us now living at some distance from the office, either due to choice or cost pressures, the removal of thousands of pounds of commuting costs has given us a financial cushion in these uneasy times. This will no doubt take centre stage once decisions are to be made regarding returning to the office. The issue with this unexpected return of cash, is that, with most commuters purchasing annual discounted season tickets, the cost of a daily ticket going in to the office for three days, will in almost all cases be equivalent to the cost of a season ticket, offering no savings at all. To experience net cost-savings, only 1-2 office-based days per week would be required.Now onto the issue of space… At risk of over-simplifying this part of the conversation, space is usually not an issue in larger homes, and buyers and renters of smaller homes are generally at a very price-sensitive part of the market. Whilst I’m sure most people living in flats would dearly love an additional 30 sq ft office enclave or a separate 60 sq ft office, the truth is that the additional £930 pa - £1,860 pa in rent, or the £21k - £42k to buy this space, may mean it falls out of the ‘must-have’ category, and firmly into the ‘nice to have’ category. Conclusion – not likely …but is there an unlikely underwriter for this cost…?
The unlikely underwriter
Who would pay for our £930 pa enclave? Rather coincidentally, this figure is almost exactly the per desk cost that businesses pay in the average City of London HQ every month! With WeWork charging ~£4,200 pa for the chance to hot desk, it is likely that the three H’s conversation (HQ, Hot-desk, or Home) will start to gather pace. £930 vs £4,200 vs £11,000? Questions of productivity differentials aside, employers may find it financially attractive to cover the costs (or partial costs) of a home office in place of the actual one. Whether they actually write a cheque or not of course hinges on the balance of negotiating power between employer and employee.Close-to-home office
In new blocks of apartments, the choice between home office, and actual office is less binary. In rented accommodation the occupier is less able to create adaptions, but ingenious landlords may seek to address a gap in the market. Within the Build-To-Rent sector, investors have the ability to create lounges within the communal spaces that provide a quasi co-working operation, perhaps in place of a previously planned bar, gym or public facing F&B. Privacy issues will need to be traded off against the solitude and discomfort of working from one’s kitchen counter. The rather un-sexy truth is that in the near future, the likelihood is that greater demand for this space will likely come from space to support the rapidly growing number of parcel deliveries. However, the ability to create business centres or lounges will be important in providing occupiers with options to both live and work from home.
The conclusion - Amazing (white) spaces & the migration that never happened
A balanced view on this suggests that it is more likely a job for George Clarke (/ Ikea) rather than one for developers & architects. Whilst there will undoubtably be some increased demand for more space, we have to acknowledge that we’re presently hyped-up and rattling around in our own four walls; so let’s not confuse temporary trends & emotions, with permanent manifestations. Personal financial pressures will drive innovation in the resolution of some challenges. Some office space will be found in the infill of underused ‘white space’ in our homes, and the desire to move to the open fields of Somewhereville might be a temporary reaction, and an acceleration of thinking for those already pre-disposed to that solution. We also live where we do for more reasons than just proximity to workplace. The lifestyle media have been eagerly awaiting the anecdotal evidence that will support their pre-written stories of 2.4 children households leaving London for the Outer Hebrides, and for a while, this virtual reality will seem true to us. However, the reality is that most of us probably quite like where we live, and regardless of that, we have inertia and attachments that temper our desire for change.
PS. Short memories and empty pockets – The magic pill
It is exactly the same set of amazing adaption skills that have enabled us to cope with our temporary norm, that may well see us revert to precisely the same set of old behaviours should a vaccine be found and distributed in the near future. Why hasn’t this boring option been widely discussed? Another of our amazing abilities as humans is to actively seek solutions to perceived future threats – we are excited by this. In the case of the real estate industry, this has manifested itself as millions of words about the ‘new norm’ (I’ve added a few above). Should a vaccine arrive, we must acknowledge that the new norm might just be the old norm minus a handful of us who have experienced epiphanies on the road to get there. When the dust has settled, we will almost all also have less money in our pockets, and while we may spend an hour a day trawling Rightmove for a fisherman’s cottage, the reality is that we will decide where to lay our heads based primarily on financial, social & professional factors (in that order).
