Many people have rediscovered passions, the value of self care and the value of spending time with family and friends. One of the biggest success stories has come in the form of residential investment property. The market continues to impress in the ever changing UK market.
One trend that has been getting attention recently and has massively influenced the residential investment property market is the fact that not as many workers have returned to offices as anticipated. For those that are able, many companies have discovered that office working and remote working are similarly productive. It really doesn’t make enough of a difference to justify spending thousands or millions on commercial property.
Nearly a year since the UK and much of the world opened back up following lockdowns this trend towards remote working has continued, and it could have big implications for city centre property.
Tech companies are deserting offices
In a piece for Wired, Chris Stokel-Walker writes about the decisions of Twitter and Facebook. The plans were to massively scale back their property portfolios and plans for further office expansion in the wake of remote working.
Stokel-Walker notes “Twitter isn’t the first to cut down its office space. In early June, Yahoo was rumoured to be getting rid of its 650,000 square foot San Jose campus, which was only completed at the end of 2021. Later that month, Yelp announced it was edging closer to being fully remote, and closing 450,000 square feet of office space across the US. A week later, Netflix followed suit, who said it plans to sublease around 180,000 square feet of property in California as part of a broader company downsizing. That echoed Salesforce, which put up half of its eponymous San Francisco tower block for sublease in mid-July.”
This is something that appears to be gathering some pace in the UK too. Many tech companies based here are paying attention to the moves of the big corporations across the pond.
With the mismatch between supply and demand, rental prices have been soaring for some time. Even though residential investment property prices look set to cool or even drop, it’s highly unlikely that rents will. This is due to the level of demand.
What could this mean for residential investment property?
Essentially it looks to be the beginning of a substantial shift from commercial property towards residential.
Large office blocks and historically commercial buildings could quite quickly be repurposed for apartments and city centre living. This is good news for investors that want to expand their portfolios and exposure to some of the UK’s flagship cities like Manchester.
Less people are able to get on the property ladder which pushes them towards the private rented sector, meaning even more demand. The market shifting towards residential investment property is an undoubtedly positive thing, not only for property investors, but also those looking for rented accommodation.
If you’re interested in learning more about the latest on goings in the market, take a look through our latest property new articles here.