Although remote work already existed prior to 2020, that was the year when it really started to grow. Businesses in the UK and all over the world started offering their employees the ability to work remotely due to difficulties meeting in person, and it was quickly embraced. A few years on, many people have returned to the office, while others would prefer to work remotely forever. How things will look 10 or 20 years from now remains to be seen, but this is an issue that could have a significant impact on real estate values in the future.
Impact on Residential Real Estate
Remote work impacts different parts of the real estate market in different ways. In the residential sector, many homebuyers, particularly first-time home buyers, are re-evaluating their priorities and seeking features that cater to this lifestyle shift.
When remote work became a possibility, many existing homeowners sought to sell up and move somewhere more lifestyle-friendly. Having access to a more streamlined process through remote, online-only real estate platforms like Sold has helped facilitate this. Like remote working, offering more flexibility compared to traditional high street estate agents has supported those looking to quickly jump into their new lifestyle.
The need for space to accommodate a functional home office has also become a must-have, as has outdoor spaces for people who crave personal green areas where they can relax after hours of screen time. Of course, high-speed internet connectivity is another non-negotiable, with companies like Starlink now making this possible even in rural areas.
Location preferences have changed, too. If you no longer need to commute into the city centre, why not live in the countryside or by the beach? As you might expect, regions that can offer larger properties at cheaper prices are likely to benefit. Rural areas like Cornwall and Norfolk already saw increased demand once the trend started taking off, and should remote work stick around for the long term, many areas like this will benefit.
Remote Work and Commercial Real Estate
While remote work has had notable impact on residential real estate, there is another side to the equation: commercial real estate. If employees are no longer coming to the office, you now have a situation where very expensive commercial buildings are sitting empty. In fact, this issue has become so pronounced that major business cities like London are facing 30-year highs in office vacancies.
We can’t assume that these vacancies will persist at this rate, but how can these spaces be repurposed if they do? More importantly, what happens to their value? Some have suggested that these spaces could be reimagined, transforming them into offices into hybrid environments that cater to both on-site and remote employees. From the perspective of an investor, though, the situation remains uncertain. While some may see this as the perfect opportunity to get involved, others may simply see a sector that’s filled with risk.
Remote work is very likely here to stay, but how that looks in practice is still being ironed out. Will a large number of employees never return to the office, or will they still commute a couple of times each week? Until questions like these are answered, it’s hard to predict where the UK’s real estate market will head next.
