In the first year of the pandemic the amount of office space in England fell by 2% (12 months to 31 March 2021), according to data from the Valuation Office Agency, part of HM Revenue & Customs. That represents a reduction in available office space of more than 18m sq ft. However, the area of office space in Greater London overall fell by 3% in the same period and the drop was even more severe in outer London (over 6%). The withdrawal of office space was generally more pronounced in smaller cities and away from central business districts, according to the report.
We can expect this trend to continue and Savills forecasts that flexible working will persist beyond the pandemic, making as many as one in 10 offices surplus to requirements in five years’ time. Mat Oakley, head of European commercial property research at Savills, says: “Our view is we don’t need as much office space in the UK or anywhere else if high levels of agile working remain…it’s reasonable to say this is a trend going forward and a trend that needs to happen.”
However, a 10% drop in overall office use could be an optimistic forecast, according to a PwC Occupier Survey of 258 of the UK largest companies last summer. The survey found that half of the organisations expect to reduce the size of their real estate portfolio and, of these, one third believe they will reduce their office footprint by more than 30%.
Housebuilder calls for planning support to cater for WFH
The fundamental driver of this shrinking office space in the UK is the rise in working from home (WFH) and on 6 January, Barratt Developments and the planning consultancy Lichfields, launched a new report calling for local planning policies to be urgently reviewed to ensure they are fit for purpose for working from home.
The ‘Working from home: Planning for the new normal’ report, which draws on a survey conducted by polling company Savanta ComRes, found that almost half (49%) of households felt their current property was unsuitable for home working with many people struggling to do their job effectively from their dining room table or bedroom - only 28% had the benefit of a dedicated space, such as a study or home office.
