Supply and Demand
Simon Morris is a London-based property advisor, with specialist knowledge of the commercial and residential property sectors. He uses this knowledge to act as a consultant for UK property investment funds looking to maximise their property portfolio’s profit potential.
As such, Simon understands the basic principle of supply and demand which characterises the office element of the UK’s commercial property sector. That’s why he’s found it particularly important to note that SME owners are increasingly choosing to run their businesses from home.
Over 80% of UK’s Smallest Businesses Now Run Their Operations from Home
An article that recently featured in the Independent revealed that a new study by Lloyds Bank Insurance has shown that over 80% of the UK’s smallest businesses – those with 10 employees or less – are now run from home.
The Big Issues for Small Businesses report went on to reveal that over three quarters of those SME owners have gone to significant lengths to make their homes ‘work ready.’ On average, they spent £1,392 transforming their home into a ‘work ready’ space.
More Financial Sense to Work from Home
The study also showed why people are choosing to work from home; over two thirds said it makes more financial sense. A further 57% suggested that it actually made their businesses more productive.
These are issues the Director of SME Insurance at Allianz Insurance, David Martin, chose to expand on whilst commenting on the study’s results. Martin said that “when starting a business many people find that their home is a great place to use as it keeps their costs down.”
Too Expensive to Rent Office Space
In other words, many people think it’s too expensive to rent office space when they are dealing with a limited flow of capital. Simon Morris believes this could be a problem for the commercial sector going forward.
SMEs are the lifeblood of the office property sector. Without them, demand for office space could decrease and drain profit from the sector. We don’t know whether the flocking of SME owners to work from home will have this effect, but it is a distinct possibility.