For several years pre-pandemic the homework rate was around 5%, compared to 1% in 1981. It rocketed to 37% in April 2020 and remains high as pandemic restrictions ease.
Three lockdowns later and office vacancy has increased (over 40% in Manchester and London and over 60% in Bristol and Leeds). Subletting is up 25% across the UK compared to Q4 2019, and we have seen negative net absorption every quarter since Q2 2020.
Around 18 million more square feet of office space is being marketed in the UK compared to pre-pandemic; 21.6 million sq ft is vacant in central London, and 61.9 million sq ft across the rest of the UK.
Right now, lack of economic growth (GDP) and low business confidence are exercising decision makers, which makes it too early to say whether increases in vacancy rates and reductions in office take up are temporary or a signal of longer-term structural change.
Surveys tend to show 80%+ employees value some form of homeworking and 50% want to retain it, which suggests it will continue to some extent in the short-to-medium term. But data also indicates that workers wish to return to central business districts – if only for part of the week.
To read more on the potential impact of working from home and the resultant outlook for office demand, download the full report.