The financial effects of the coronavirus crisis have been many and varied, but one of them at least may be positive.
Many more of us are suddenly working from home.
Companies around the globe have adopted mandatory remote work. Many of us are swapping the commute to the office for a stroll to the home office.
It is reasonable to believe that this shift will become the new normal for many of us. While we might miss the camaraderie and the buzz of the workplace, we might be happy avoiding the crowded trains and tubes.
At Continuum, we look at some of the financial implications.
The technical questions are easy to answer
Broadband, wi-fi and the fact that most businesses have networks capable of remote access mean that people can work just as effectively from home. According to the Office of National Statistics, as many as around 8m spent at least some of their working week in the home instead of the office.
Self-employed or teleworking for your employer, working from home is simple from a technical viewpoint, and most of us will already have the necessary connectivity in place.
There could be some savings
Working from home of course avoids the cost of the daily trip into work. With many city office workers paying thousands of pounds a year for a season ticket, and those who travel by car no longer needing to pay for fuel and parking, it could mean the equivalent of a major pay rise.
There are other less obvious savings. Buying lunch every day can mount up, even if it is in a sponsored canteen. And there could be some savings on clothing. The business suits tend to stay on the hanger even when we are having a meeting, when that meeting is via our screens.
But there will be some extra costs
Being a homeworker will mean your utility bills increase. The energy used by your laptop is not that great, but using the kettle, toaster, oven and heating – rather than your employer’s – may mean a noticeable increase in your energy uses and bills.
The energy companies have noticed an increase in domestic use as a result of lockdown.
There could also be some questions about insurance. Those who spend the odd day or two on paperwork or its electronic equivalent from home will have no issues, but if you work from home regularly, you might need to inform your insurer. Depending on your location and your insurers attitude, your premium could either be increased because of greater risk, or fall because your home will be occupied.
If you run a business from home your mortgage company will probably want to know – but if you are simply working from home as an employee, there should be no issue.
The longer term impact
Thousands of people and businesses will have discovered the benefits of home working as a result of the lockdown. Individuals avoid the stress of the commute, businesses can reduce the costly floorspace they need, and properly managed, productivity can actually increase.
Some observers are predicting that working from home will be here to stay. If it is, there could be some impacts on the housing market.
One is that people will want homes with a room to use as a dedicated office. Working on the kitchen table is possible, but the professional impression is dented when an important telemeeting is interrupted by children demanding to be fed or entertained. Even single people working from home welcome the chance to close their office door to mark the end of the working day, even if the door is actually to a spare bedroom.
The second effect may take longer to develop, but it could be more dramatic. Big cities are surrounded by commuter towns, with house prices underpinned by their proximity to work. A general adoption of home working, with no need to travel in every day could let buyers save money by moving further afield.
A bigger commuter belt could mean new opportunities for property investment in the medium to long term.
What should you do now?
If you are discovering the advantages of home working and want to make it permanent, it might be time to look at your budget, and see ways to use any spare cash released. Savings and investments – and even your pension – could all be boosted if you find you are no longer giving thousands of pounds to the train company each year.
It could be time for a chat with a Continuum adviser.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy or any type of Home Insurance product, you should seek independent financial advice before embarking on any course of action.
The value of property investments can fall as well as rise and you may get back less than you invested.
As property is a specialist sector it can be volatile in adverse market conditions, there could be delays in realising the investment.
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