The pandemic has changed everything. Thanks to the wonders of technology, we no longer need to be in the office to do a full day of work. And even with the lifting of restrictions, many people have maintained this new normal, splitting their time between home and the office.
Welcome to the world of hybrid working. The Covid-19 pandemic has left an indelible impact on our society, not only from an economic and global healthcare perspective but also on where and how we do business.
Ultimately, this new environment caused disruption in the real estate market and industry. The way businesses and consumers have begun to view ownership and leasing is very different from before.
How things are shifting.
Real estate pricing and development are primarily influenced by two things: where people work and where people live. However, the pandemic has changed both of these ideas. With remote work being the norm, people no longer need to work in a building or office space.
People are looking to relocate or are already moving to the countryside and small towns, away from expensive urban real estate. Since going to work every day is no longer a thing, people no longer have to worry about being closer to public transport.
Redefining commercial real estate.
Regarding commercial real estate, the distribution of spaces within a building has adapted to meet our post-pandemic needs. Google, for example, has introduced “team pods”, with reconfigurable rooms which can be rearranged depending on the requirements. Workers are given more space to accommodate those who may still be wary of face-to-face contact. Meeting rooms benefit from new technologies to enable office-based teams to collaborate more effectively with their colleagues in other locations.
Companies also have taken the opportunity to reduce their footprint and lower their costs. According to Statista, the commercial property sector in the UK is worth $1.5 trillion, a decrease of $2.4billion compared to 2019.
And whilst many predicted doom and gloom in the industry, many other businesses are moving ahead with planned office upgrades. For them, the pandemic is not a chance to reduce space but change how they use it.
The housing market & the hybrid challenge.
While the pandemic has shifted the focus to where people are buying, it has not slowed residential buying per se. Buying interest has just changed location.
With lockdown restrictions imposed, many people decided to quit city centres for the wide-open spaces of the countryside. Today, as people increasingly acknowledge that they do not necessarily have to be tied down to a physical location for their employment and livelihood, the residential real estate market will keep seeing a constant shift.
Small towns and the countryside are seeing a significant influx of interest. Areas within a reasonable distance from cities have seen an increase in young professionals looking to get more for their money than in cramped and overpriced cities. They seemingly have a better quality of life at a better cost of living.
Self-employment and freelance work have also increased, with more people becoming mobile and less dependent on being near a city. For instance, schemes such as the ultra-fast broadband roll-out funded by the government and the EU in Cornwall have meant many rural areas now experience the same level of connectivity as cities.
The emergence of different kinds of working and living spaces.
Hybrid working has had a noticeable impact on the way we live. However, change creates opportunities. Real estate activity has not so much declined as being displaced with new possibilities opening up elsewhere. It is a chance for the industry to adapt and evolve to meet the needs of people and the market.
Although there are signs that some people are slowly moving back from the countryside to the city, remote working is here to stay.
Additionally, we may see an increase in the demand for properties with home offices. Or at least with space in the building for a co-working setup. Having work studios and the ability to have dedicated workspaces integrated or alongside living spaces will be the new favourite.
Contact us today for more information on real estate opportunities in the UK and overseas.