How will the return to office working affect the housing market?

31^st January 2025

The impact of the Return to Office Mandate on the UK housing market

Since the COVD-19 pandemic, the number of people Working from Home (WFH) has massively increased. This comes as no surprise to anyone. The impact on the housing market was not surprising either – as workers ditched the office and the daily commute for a more flexible work lifestyle – we saw an increase in demand for properties further afield.

As Property Search Agents, during the pandemic we saw a surge in demand from clients looking to make the move out of London to gain more space and a different lifestyle. According to the European Central Bank, larger homes located further away from the city centre saw the fastest growth in UK house prices – with an increase of 20% between Feb 2020 and June 2022.

Five years on (can it really be?!) and the pressure for many Central London office workers to return to the office full-time is mounting.

Last year, several large companies including Amazon announced strict return to work mandates. So far this year, JPMorgan Chase and ad giant WPP are among the firms that have summoned staff back to the office.

Despite backlash from staff, 83% of CEOs expect a full return to office within the next three years, according to a KPMG survey.

So where does this leave the property market?

Well, it’s probably good news for the London Office Property Market – which according to research company MSCI saw values for London Office Property fall by 20% between the second quarter of 2022 and the second quarter of 2024. Some Property Groups had already started to think creatively to soften the impact of the decrease of workers in the office - Canary Wharf for example have adapted some office space to mixed and residential use and developers are adding roof terraces, and other spaces to make the return to work more attractive to employees.

But what about the residential property market? Will we see a reversal of the “escape to the countryside” trend? A “return of the city-dweller”?

Probably not. WFH has opened the Country’s eyes to “Life After London”. But for those considering a move out of London, with the future of hybrid working still unknown, commute times back to London will become increasingly important. Whilst a daily commute of 3-4 hours might be doable one or two days a week, for many, it will quickly become unsustainable when days in the office increase much beyond this. As a result, we’ve found that locations with good transport links are regaining popularity among homebuyers.

It's still too early to know just how many companies will revert back to full-time office working but as many CEO’s continue to recall workers to the office for at least part of the working week, interest in centrally located property and homes with excellent transport links is likely to continue growing.