Media Mentions & Press Releases

 

Homeworking - is this an inflection point for the UK’s office market?
By Mohammed Iqbal, Founder & Group CEO, MBU Capital


MBU Capital in the NewsThe Covid-19 lockdown has shown us that home-working is highly effective for service industries.  Many of us are getting more work done, more efficiently – and we have several more hours a day by cutting out the daily commute.  Could homeworking become a permanent part of office working when the lockdown is over – and if so, what will it mean for the supply of office space in towns and cities across the UK?


In recent weeks we have all become very used to remote working.  Desktop video conferencing means we can meet our colleagues when we want.  Using Microsoft Teams or having a Zoom meeting is now a normal part of the day for many.
What is more, we have found that many professionals servicing the property industry, including architects, surveyors, valuers and agents are able to respond far quicker to requests from their clients.  Cutting out long meetings or time spend travelling means that greater focus can be directed towards virtual communications such as Design Team Meetings (DTMs) and other scheme specific meetings. If this is true in the property sector, it is likely to be equally true in other office-based industries.


So, what happens if the shift to homeworking becomes permanent across many service industries?  Will some employers now decide to downsize and make homeworking a permanent part of their business model?  It will have its attractions for many businesses, as it could significantly cut the cost of maintaining large offices.  Smaller, more flexible office ‘hubs’ where colleagues can meet could replace the traditional office where every member of staff has their own desk.


If this shift happens across a significant number of businesses, it could have a significant impact on the demand for office space.  Some businesses may decide to downsize their office requirements and others are likely to be impacted by the inevitable economic downturn.  There are millions of square feet of space dedicated to service industries in the UK’s towns and cities.  Given that there is now likely to be a slowdown in office lettings, this could lead to a glut of empty office and the pipeline of new office stock falling.


Property owners and planners will need to decide quickly how to respond to an oversupply of office space.  One answer is clearly offered by the government’s recent announcement1 that it wants to relax planning rules to build more housing. That said some local authorities will adopt and use Article 4 and withdraw PD rights and thus place the emphasis about coming back into planning process with associated lead time and cost2.


The Housing Secretary, Robert Jenrick, MP, has announced that he is considering proposals to turn disused buildings into homes more quickly.  He also wants local authorities to update their Local Plans so that they can build enough homes to meet the needs of their communities.


As a result, it is entirely possible that local authorities, many of which have been reluctant to grant office-to-residential permission , may suddenly find that they can remove empty office space from their boroughs – and release enough residential accommodation to make a sizeable  dent in the housing stock crisis.  Our Park Place scheme in Stevenage is a prime case in point.
This could perhaps be one silver lining to the terrible Covid-19 pandemic.  A shift to better working patterns for millions of office workers and releasing enough property into the market to create more high-quality housing.


1. https://www.gov.uk/government/news/robert-jenrick-plans-for-the-future-to-get-britain-building
2. https://www.london.gov.uk/about-us/organisations-we-work/old-oak-and-park-royal-development-corporation-opdc/planning-old-o-12  

 


Read related Articles