In the past, working from home was a privilege reserved for only the most elite of professionals. Even before COVID-19 broke out, within the last decade, the employment sector has witnessed an upsurge of people are turning away from the traditional 9-5 office jobs and pursuing careers that allow them to work remotely. This is largely because of how much freedom it provides both workers and employers alike. Working from home has become an attractive option for those seeking a better balance between family life and professional obligations. With so many people looking into this type of work opportunity, several concerns have been raised about its impacts on house prices in different regions across the U.K. Let’s explore these impacts.
Increase in demand for property
With more people working from their home offices, the demand for property has seen a noticeable increase over the past few years. This has resulted in more companies investing in office space within many regions, thus creating jobs and keeping demand for properties on an upward scale. As a result of increased demand for property, house prices in most areas across the U.K. have increased, good news for homeowners and real estate investors.
Increase in the supply of houses
With so many people opting to work from their homes, they will likely wish to upgrade or purchase a new property in the not-too-distant future. Because of this, they will probably turn to the buy-to-let market for investment opportunities. This, in turn, will mean increased demand for properties which should see prices increase across this sector as well.
Increase in Prices of houses near the working place
This is because buyers are willing to pay more money to live closer to their work due to reduced transportation time and cost. This is especially true for executives with long commutes, who now opt for homes within walking distance to their workplace.
Higher demand for a second home
It is also likely that, with more people working from home, there will be a significant increase in demand for second homes. This will mean an increase in individuals looking to purchase holiday homes or properties within specific regions. More buyers purchasing extra property leads to an appreciation in house prices within these regions in the long run.
Challenging Task to track residential housing stock
This mode of employment may make it harder for the government to monitor the residential housing stock. This is because there are no visible transactions within this market, and it can be challenging to determine which homes were bought by those who work from home and those who do not. This makes it harder for policymakers to decide which policies must be enacted to balance the housing market.
Increase in house prices where land is scarce
This works in two ways:
• Increase the demand for homes in remote places with limited infrastructure: People who work from home prefer to live in areas near their places of work, having a limited supply of houses available. This creates competition for homes and drives prices up.
• Increase the demand for small remote homes: Working from home culture has also created a demand for small houses. People living alone or couples choose smaller houses to accommodate their limited needs. This increases the demand for prefabricated houses or second-hand homes, which will drive prices up in areas with a limited supply of land.
Reduction in house prices where there is ample land to build houses
This is mostly because working from home has created a demand for small homes in remote areas. Areas with ample land to construct new houses won’t be affected much by the change in house prices as people will still opt for large homes with lots of rooms.
No need to buy a house if you’re living with family
According to recent studies, more millennials are moving back in with their parents during the first few years of their careers. This is mainly because they may not afford to buy a home and financial commitments such as student loans and credit cards.
If they can stay with their parents for a few years, this allows them to save up the money needed to buy a house eventually. This way, they can also avoid costly rent and even enjoy having all their meals prepared at home.
