Working from home­­­­­ or living at work?

2020 saw a complete shift in how most people use their homes and gave them plenty of time to reflect on it. This has led to a revaluation of housing amenities and we are already seeing glimpses of what that will entail in 2021 – from the sharp increase in minor planning applications as homeowners look to extend their living space either by renovation, or in some cases by selling up and moving to more rural locations; or by the number of flexible office operators seeking ‘work near home’ office provision.

There was already a shift toward more flexible working practices and the pandemic has accelerated this. Employers will be more accepting of employees being in the office less frequently and working remotely, during 2021 and probably beyond. This will be reflected in the choices people make in the housing market and we expect more demand for properties in attractive local environments with outdoor space and room to work. This may mean that more people will increasingly consider living further away from city centres as they place their living environment above proximity, or at least accessibility, to their workplace. This may reduce an element of demand for urban living and lower some of the upward pressure on house prices in London and other key cities.

These shifts will be a consideration for developers in 2021 as the search for strategic land opportunities increases and consumer demand is borne out through planning and design.

We expect more demand for properties in attractive local environments with outdoor space and room to work.

Home sweet home?

The pandemic has also heightened awareness around health and wellbeing and the consequences and costs of poor housing. Building Research Establishment (BRE) has calculated that the annual cost of inadequate housing to the NHS is at least £1.4bn and indicates that the health impact is on a par with smoking. The heightened awareness will be reflected in 2021, particularly in urban design, as city planners and designers adapt to reinvent cities in the wake of the pandemic.

Delivering the homes we need

Covid-19 will also accelerate the trend toward more use of modern methods of construction (MMC) in 2021. Housebuilding activity was hit hard during lockdown, with the vast majority of large sites closed and construction resuming at a slower pace once they reopened because of social distancing and safety measures. MMC sees houses built in an off-site factory environment and then delivered to site, utilising far less labour and making it much easier to implement safe, socially distanced working without impacting efficiency. A report by RIBA highlighted potential for a 70% labour reduction and a National Audit Office report showed the benefit in construction time, with sites often being delivered twice as fast.

Prior to the outbreak of Covid-19 there were already compelling reasons for a structural shift in the way we deliver houses in the UK. The current labour force is aging and failing to attract new entrants and is highly reliant on migrant labour, particularly in London. This was a vulnerability following the Brexit vote and is now more of a risk with reduced migration opportunity (and willingness) in the wake of Covid-19.

Increased regulation is likely to focus on energy efficiency and a push for more sustainable construction techniques.

The construction sector also has an important role to play in meeting the UK’s carbon emission targets. It currently accounts for around 20% of all waste produced in the UK and 10% of carbon emissions. The superior energy efficiency profile of MMC will appeal to the institutions and other large-scale investors who are increasingly building and owning housing in the UK. This will help drive more adoption of MMC.

Increased regulation is also likely to focus on energy efficiency and a push for more sustainable construction techniques. Homes England already uses the adoption of MMC as a key scoring criteria for the sale of public land. The combination of the policy push and appeal to housebuilders to diversify and de-risk the way they deliver their homes will see this sector grow in scale in 2021.

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