One of the main consequences of the Covid-19 pandemic has been a work from home boom as remote working became the norm for many during the lockdowns and various restrictions.
To facilitate the extra time spent at home in the last two years, as well as to provide possible extra space for remote work, there has been something of a house extension boom as homeowners have sought more space.
But will the recent scrapping of the work from home guidance, which was brought back in late last year as part of the Plan B restrictions to slow the spread of the Omicron variant, have any impact on the value of these homes as space for working from home potentially becomes less important?
Evidence throughout the pandemic showed that interest in home extensions has soared.
For example, Google data found that the search term ‘house extension’ reached an all-time high in 2020, as homeowners searched for ways to get the most value out of their homes.
With the UK experiencing two national lockdowns in 2020, as the first and second waves of the virus were tackled, homeowners unsurprisingly spent more time searching terms related to expanding their living spaces.
As working from home remained prevalent across the country, people wanted their houses to work harder for them than ever, with dedicated workspaces, or relaxing spaces in which to destress, becoming much more important. Extra space and flexibility became crucial.
That said, the data suggests the spike in desire for home extensions was not solely down to the pandemic.
Apart from a dip during the recession that followed the global financial crisis in 2008, with many people tightening their belts, interest in house extensions has been steadily rising year-on-year.
Peak interest typically occurs during the winter months and it’s usually to do with creating more living space, which could be used as a home office, a home gym, or merely a room to escape it all.
The appeal of a home extension – or other similar house improvements – is that it’s cheaper than moving house and typically adds value to a home in the long-term, which makes it an affordable, desirable, and achievable option for many.
Elsewhere, analysis carried out by Santander UK found that UK homeowners applied for more than 60,000 extensions and conversions to improve their homes during the 13 weeks of lockdown that occurred from late March 2020 onwards.
Covid-19 and lockdown prompted two in five (40%) homeowners to bring forward their home improvement plans, the research discovered.
Do they usually add value?
According to a recent Uswitch article, how much value an extension can add depends on the size and quality of the extension.
“Estate agents often consider the number of bedrooms and bathrooms when quoting value, and often floor area is also used,” the advice piece said.
“Outside of London, property typically costs £900-£2000 per metre square, whilst inside London which.com found that property costs start from around £3,000 per square metre.”
Previous research by high street lender Nationwide on the value of house improvements to an average three-bedroom home suggested that an extension can add up to 23% to the value of a property.
But a recent Yahoo! article questioned whether extensions are cost-effective anymore, with the rise in costs of labour and materials caused by both Brexit and Covid.
The piece quoted Andrew Tucker, from property consultants Bidwells, who said that homeowners must ask themselves a few questions before deciding on whether and how to extend.
- How much space do you have to extend?
- Will you still have enough outside space and garden?
- If you are detached or semi-dettached, will an extension still provide side access?
- Do you require planning permission, or can you extend under permitted development rights?
- Should you go for one or two storeys (a one-storey extension is usually more cost-effective)?
Despite rising costs, the piece concluded that extensions – which come in all shapes and sizes, from loft conversions to a new kitchen at the back of the house – can still add value to a home and are therefore worth doing, provided homeowners carefully consider space and layout.
Will the change to WFH guidance affect a home with an extension’s value?
The government recently dropped its advice to work from home if you can, as it phases out the restrictions brought in to slow the spread of Omicron. But, for many people, a hybrid working pattern is likely to persist well into the future, as they seek a better work/life balance.
While some are happy to return to the office, others are much more reluctant, or are demanding at least some days of the week from home. Travel on Tubes and trains, and footfall in major employment hubs, remains well down on pre-pandemic levels, although there have been steady increases.
With the advice changing so often throughout the past few years, some people will be hesitant to return full time to the office.
Younger workers, the buyers and sellers of the future, are most keen on hybrid work, according to the BBC.
It seems unlikely that things will return to exactly how they were pre-pandemic, with offices full to the brim every day and city centres packed with office workers. Many will continue to shun the commute where they can, or seek a compromise where they are in two or three days a week. Some will want to work from home full-time.
Dedicated work from home space is therefore likely to remain a key priority for many, in a way that wasn’t the case before Covid hit our shores. Even if people are only working from home some of the time, a fully functioning workspace will likely be considered as essential as a kitchen or bathroom.
What’s more, one of the major trends from the pandemic has been the race for space, as people seek bigger or roomier homes. That hasn’t changed much, even as society has reopened and there’s been a shift back to town and city centres, so there is every chance that homes with more space – which extensions help to provide – will continue to command higher prices.
In general, a home with an extension will create added value, and it seems unlikely the latest change to the work from home guidance will alter that.
Whether home extensions will be adding the same value they once did, due to labour shortages and the soaring costs of construction, is much more up for debate.