In early 2020, overnight working from home (WFH) became widespread across the globe. As lockdowns have ended in the UK, we have embraced ‘the new normal’ with hybrid working models more common than ever. However, for some, the weekly commute has returned. This change in working behaviour across the UK has, over the past 2 years, dramatically impacted house prices.
With such disparity between working behaviours, Outra’s data science team has sort to identify who are these hybrid or remote workers, and how this is influencing the UK’s housing market. By analysing commuting data, we have looked to identify where the resulting ‘race for space’ is occurring. To start to understand Outra used data from a variety of sources, modelled to provide insight and identify trends, including;
- passenger data for the 40 UK stations with themost marked difference in passenger numbers – the 20 highest and the 20 lowest.
- we identified suburban stations with the highest and lowest change in entry and exit volumes as a proxy for WFH.
- the numbers of people who commute to work using the Office of Road and Rail information for the 12 months ending in March 2021.
Pre and post lockdown trends
In locations where there were minimal increases in house prices, compared to the wider UK trend, we identified 3 key factors. Where these were present, homes near these back-to-work stations, prices only rose by 8.7%.
- Train stations largely located in and around London, where properties are higher in value. Occupants are more likely to work full time, travelling to and from the office.
- Higher number of flats and apartments. Fewer bedrooms compared to more central properties, meaning occupants are less likely to have access to adequate WFH space.
- Property occupants near train and bus stations are more likely to be in managerial roles. Increased seniority requires a more regular presence in the office — resulting in more frequent commuting.
Where we are seeing the ‘race for space’, is where people in the inner cities sought to transition to WFH locations, which in turn has fuelled the UK’s property price growth. Property values near WFH stations have increased by 13.5%, outpacing average country-wide growth since 2020.
- Local properties are more often owner-occupied and bigger in size, giving less incentive to commute.
- Property occupants living far away from their offices and nearest stations are more likely to work from home.
Working from home trends today
Now the UK has fully opened up, a majority of employers have embraced new ways of working. As workers demand a better work life balance, Covid WFH practices also demonstrated that businesses could still be just as productive. As we saw with key worker lockdown policies, working from home is more feasible for some types of workers than others. High earners are the ones most likely to be benefiting from a hybrid work environment, with 38% of workers earning £40,000 or more currently working both in the office and at home.
Meanwhile, lower earners are less likely to WFH at all. Lower earners who reported hybrid working between 27 April and 8 May 2022 included:
- 8% of those earning up to £15,000
- 24% of those earning between £15,000 and £20,000
- 21% of those earning between £20,000 and £30,000
- 32% of those earning between £30,000 and £40,000
There also seems to be an age element to those either able to or wanting to WFH, as those aged 30 to 49 most likely to do so.
These changes in working patterns have had a material impact on the housing market. Any further changes or an impending recession will either reverse or accelerate those shifts. Only by understanding the unique data points that create each individual householder can businesses adjust to new trends.