Twitter, which employs 5,000 people, has ordered its staff to stay at home in the current crisis and told them they never have to come back to the office if they don’t want to. No, they haven’t all been fired, it is simply following a growing trend of allowing its workforce to work remotely from home. Many companies in different industries in the UK are following suit.
The trend has its roots in the San Francisco Bay area, where exceptionally high salaries and cost of living have meant companies have resorted to people working from home to reduce costs and enhance their appeal to prospective employees. The COVID-19 crisis has accelerated the trend across multiple industries, and it is now rapidly spreading elsewhere.
What does the trend mean for the housing market, particularly in London?
According to one report, the number of people working from home has risen by a fifth in the last ten years and if this trend were to continue at the same rate, around 2.1 million people could be working full time at home by 2040 – and that was before the recent lockdown.
Ask any one of the thousands of people living in the commuter belt surrounding London whether they enjoy their daily commute (often up to two hours each way) on crowded public transport and at an exorbitant cost and you will receive a very short reply, which would be unprintable here.
The current crisis has shown that working from home does not necessarily mean a reduction in productivity and the financial and ancillary benefits can be considerable, both for companies and employees.
Will people want to go back to the daily grind of commuting when they have enjoyed the alternative? Some will, but for many, the answer is ‘No, definitely not’. As we all know, once the genie is out of the bottle it is difficult to get back in.
Demand in London is not going to disappear overnight so the effect on house prices in the short term should be minimal. Nevertheless, this seismic change will impact the market and it is a question of ‘when’ and not ‘if’.