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‘Flexible working’ trend is stifling commercial office market, report claims

A trend towards flexible working is having an adverse effect on demand for commercial office spaces, a new report claims.

A comprehensive study published by peer-to-peer lending platform Lendy earlier this month has argued that demand for UK commercial office space has plummeted by more than half (56 per cent) in the last decade – and that the ‘flexible working’ trend is largely to blame for this.

The group’s report notes applications to build new office buildings have fallen by a surprising 58 per cent in the past ten years.

It adds that that only 2,300 applications to build new office buildings were approved throughout 2017/18 – 56 per cent less than the number approved in 2007/08.

Lendy has voiced concerns that the ‘flexible working’ phenomenon is stifling demand for new offices among businesses, as more and more companies encourage their staff to work from home, or to take advantage of shared working spaces such as London’s increasingly popular WeWork facilities.

Liam Brooke, Co-Founder of Lendy, said: “Modern ways of working mean that offices are no longer as essential as they may have been in the past.

“Formerly, rising employment figures may have signalled a requirement for more offices. However, there is now less need for offices as employees can, in many cases, work just as effectively from home or shared workspaces.”

He stressed that demand for office spaces – and commercial property – still appeared to be strong, but that “banks simply aren’t lending enough to property developers to allow them to get their projects off the ground.”

“This is why we are seeing more and more developers choose alternative finance options to fund their project,” he said.

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ELS Legal is an international law firm based in London with more than 50 partner offices across the world. As part of the Cathay Associates global legal network, we are the first choice law firm for a number of British businesses and overseas clients.

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