After the UK passed the peak of the pandemic and the first relaxation rules are starting to be implemented, many London businesses are still reluctant to welcome employees back to work because of Coronavirus fears.
Six months into the pandemic, remote work has become a way of life for Londoners and firms that were previously sceptical of the concept discovered that this work model has its advantages. Since things can’t return to exactly the way they were before the pandemic and businesses need to restart operations gradually, following a strict set of measures that could impact efficiency and employee wellbeing, many have preferred to allow workers to stay at home. Of course, this cannot happen in fields where the employees’ physical presence is required, such as construction, manufacturing, accommodation, and food and services, so the trend is more visible in fields such as technology, marketing, and finance.
ONS reports that nearly half of Britons are now working from home
According to a recent survey from the UK’s Office for National Statistics, 49% of British employees were working from home between June 8 and June 14, compared to 41% the previous week. However, the ONS explained, this percentage included both those who worked exclusively from home and those who worked from home a few days a week.
The practice is widespread in companies of all sizes and, even if initially executives were afraid that remote work would reduce productivity, reports have been consistent in showing that the WFH model actually offers many advantages:
- Reduction of commuting time
- Lower office costs for businesses
- Lower carbon emission rates
- Higher employee morale
- Access to a broader talent pool
- Fewer sick days
Of course, this isn’t to say that working remotely, especially at this challenging time, doesn’t have its shortcomings. UK businesses that watch to switch to this model need to invest in remote collaboration solutions, think of alternative ways of strengthening employee bonds, and even offer their employees access to free mental health services so that they can better cope with the emotional impact of the pandemic. However, the benefits clearly outweigh the risk of catching the Coronavirus at the office.
London businesses are considering permanent work-from-home models.
In the US, several big companies like Twitter, Square, and Facebook have announced that they will allow their employees to work from home indefinitely and this trend could soon pick up in the UK as well. In London, three firms asked their employees to work from home in February as a precaution against the Coronavirus, even if at the time the pandemic wasn’t the national concern it is today. As a more recent example, national law firm Slater and Gordon announced that they would move out of their London offices in September, at the end of the two-year lease, and that all its 2,000 employees will work from home indefinitely. No employees will lose their job as a result of this measure.
For many London businesses that already offered remote work occasionally, the lockdown period has been an occasion to test remote work as a long-term option and fine-tuned the process to better accommodate employee needs.
But even the businesses that won’t transition to a full work from home model might still change their practices somewhat, studies say. According to an SHP report, 30% of people in the UK don’t feel safe returning to the office and that 71% of British businesses plan to adopt more flexible remote work policies after the lockdown ends.
Remote work has a major impact on the real estate market.
The COVID-19 pandemic has had a profound impact on many fields, and it was only a matter of time until the record numbers of remote employees changed the real estate market. This impact has been observed both on residential and commercial properties.
First of all, when it comes to residential properties, agencies such as Walton Robinson in Newcastle have observed a trend: people are starting to seek homes further away from the city centre and closer to the outskirts. The same also applies in London, where rental prices on the outskirts tend to be cheaper, so for the same price as an uptown apartment, they can afford to rent a large house with a garden, where they can spend more time outdoors. Since home becomes the new office and people have to work in the same place with their spouses and children, it’s understandable that they want to move out of small studios and live in more spacious properties, where they can set up a home office. Besides, since employees don’t have to commute to work anymore, sacrificing space for a central location no longer makes sense.
Secondly, the Coronavirus pandemic has also changed commercial real estate and, experts say, the impact has been dramatic. To give a bit of context, the trends on London’s high street were already problematic for property owners: there were fewer shops on the high street, and more service venues, such as cafes and hairdressers, whose services can’t get online. But because of the lockdown, the services industry has been put on hold, which means that the commercial real estate sector has been hit twice as hard. Commercial landlords are struggling to collect rent costs, and if the current situation continues, experts estimate that the capital value of retail properties could drop by 20-30%.
Post-lockdown work trends can also affect providers of office space in London. If people continue to work from home after the pandemic ends and businesses discover that productivity levels don’t drop, there will be less need for office space. As a result, commercial landlords will need to adapt, drop prices, and possibly convert office blocks back into residential flats and apartments.