Physical office spaces have been hit hard

A report by Savills shows there is still a strong demand for office based working, despite COVID-19 restrictions demonstrating that remote working is achievable for many UK industries. Eighty-nine per cent of respondents to a survey from Savills said they believed that physical office space remains a necessity for companies to operate successfully.

In the six months to March 31^st (remember, COVID-19 lockdown rules came into place on March 23^rd) developer confidence was strong, and new office construction was at an all-time high. However, inevitably with many companies being reticent to return to office working, despite new government encouragement to do so, developer confidence in future leasing demand has fallen.

Construction has halted across many office development sites, and existing buildings have remained virtually deserted. When Deloitte Real Estate surveyed developers at the end of March, they were unanimous in their response of ‘worse’ in regard to their expectations for leasing demand in the near future.

So, could the design and size of office spaces change? Respondents to Savills survey believe so, 71 per cent think the design of new office spaces will change and 74 per cent believe the size of new developments will be a consideration for developers and employers in the future. Many employees will be keen to continue working remotely, partly due to safety concerns and partly because they’ve enjoyed the convenience of working from home.

It appears unlikely that we’ll see a complete drop off in demand for office spaces. However, developers will need to react to changing demands. Office spaces will need to reflect the demands of a more mobile workforce, with a higher desire for remote working. Desk sharing may be an option for employees who spend less time in the office, with desks occupied on a rotational basis.

 

What about residential?

Transactions have hit rock bottom with sales hitting their lowest figures in 20 years in the three months to June. Physical property viewing stopped in March, further to this home valuations were also impossible in person, both leading to a contraction in the market.

In mid-April, Savills made a dire prediction that London house prices would fall between five and ten per cent.

COVID-19 has also restricted the construction of new builds. Construction restarted on thousands of homes across the UK in the second week of May as the Government agreed a Safe Working Charter with the Home Builders Federation.

Estate agents are allowed to visit properties for photography and people who want to move home are able to again. It’s important to follow the advice on moving home during the pandemic on Gov.uk. Advice includes vacating properties when prospective buyers are shown around, and thoroughly cleaning a home before new owners move in.

Escape to the country

London has been the most severely impacted place in the UK. With bars and restaurants closed for the time being, and access looking to be restricted for at least the foreseeable future, many Londoners are thinking of retreating to the countryside, where the virus is less prevalent and less easily transmitted than in the dense capital.

For people who have long harboured an aspiration to move to the country this wish may have been intensified in recent weeks. Will we see an exodus from the towns and cities with more and more people moving to the country? What can the property industry do to meet these demands?

Video tours could prove to be an essential marketing tool for potential buyers that cannot travel to view homes. Making use of VR and 360 video technology would give homebuyers the feeling of really being at a property rather than just looking at stale photography which doesn’t bring it to life in the imagination.

A move to the country represents the freedom of more open space, which is much needed after months of being cooped up indoors, without easy access to parks and large garden spaces, which are abundant in the country.

Meeting customer expectations

The public is understandably anxious and a little cautious about the relaxation of lockdown measures, although social distancing of 1 metre is still in place. For property industry professionals to gain the trust of the public, it’s essential that they recognise it’s not business as usual.

Social distancing must be observed and property brands will do well to clearly communicate all the efforts they are taking to prioritise safety over profits.

The market is shifting as a result of the pandemic and property has to move with the times. As mentioned office space will have to be reimagined, the same can be said for residential space. More prospective buyers and renters of flats are looking for work from home facilities, these are an attractive feature for consumers, but may need to be rethought in the wake of COVID-19, more space will be needed if workers want to work remotely, while observing social distancing.

What do buyers and renters want post lockdown?

Developers, estate agents and other property brands can respond to the COVID-19 pandemic by showing an awareness that the market is shifting and that business may need to be carried out differently in the post COVID-19 world.

Brands will also have to be creative in how they manage delicate situations like viewings.

An integral facet of the change in approach necessary is improved communications between brands and customers to demonstrate that their safety is paramount to property companies, this will reassure buyers and get the property market moving again.