There are basically two reasons to live in a city. The first is because it’s where you want to be and the second is because it’s where you need to be for your work. Similar comments apply to “commuter-belt” areas. For people in the second category, the COVID19 pandemic may have served to push companies into offering home working as standard, at least for part of the time. If this did happen, then it could open the door to a mass “escape to the country”.
Will companies offer home-working as standard?
Arguably this is the key question and it’s harder to answer than it may sound. In the short term, companies may have very little option if they are to manage safety in a post-Coronavirus environment. If workers needing to be socially-distanced becomes part of the “new normal” then economic and practical realities may force companies to use home-working to make that happen. Even if it doesn’t, companies might still be interested in promoting home-working to reduce the amount of office space they need and hence reduce their costs.
On the other hand, companies have a duty of care towards their employees. This includes providing them with a safe working environment. If/when companies can enforce social-distancing in an on-site environment (or if the social-distancing requirements are removed), they might feel more comfortable having employees on-site. This allows the company to take direct care of all practicalities and provide supervision.
If, however, companies start cutting back on their direct employees and making greater use of freelancers, then remote working could basically emerge as, if not a standard, then at least a common practice.
What would an upswing in home-working mean for the housing market?
An upswing in home-working might not necessarily mean that everyone would immediately rush out and look for a home in the remotest area they could find. It would, however, mean that anyone who worked from home regularly would need to find an appropriate workspace.
Some people might be willing and able to make existing rooms do double-duty, especially if they were rooms which were used fairly infrequently (e.g. dining rooms and guest bedrooms). Other people, however, might want or need a dedicated home office. In fact, this might even be a requirement for working from home to meet standards in background noise (or lack thereof) and data security. These requirements might favour moving further out from the city centre.
If, however, people also need a robust broadband internet connection, then a truly rural area might not be the best option, at least not yet. The government has committed to improving the availability of high-speed broadband. It is, however, arguably, very hard to predict how quickly improvements will be made, given that the UK is still dealing with the turmoil of the COVID19 pandemic while also heading into what should be the final stages of the Brexit process (assuming the government and the EU stick to the established timetable).
What does this mean for the mortgage market?
Mortgage lenders need to be able to assess the market value of a property to make an accurate judgement of the risk of a potential loan. If consumer sentiment moves away from prioritizing location with the result that people are less willing to pay a price premium for homes in certain areas, then mortgage lenders may have to rethink their traditional valuation models, at least to some extent.
It will be interesting to see if the “remote” trend takes hold and if so to what extent. For example, in addition to home-working, there’s also the prospect of home-schooling right up to university level.
Your property may be repossessed if you do not keep up repayments on your mortgage.