Remote working and affordability

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 18. May 2022

Looking to speak to those in mortgage community about impact of remote working and affordability.

  1. Could  remote working change borrower affordability (rising utility bills etc)?
  2. How could this impact new and existing customers?
  3. What would your advice be to clients who are working fully remotely?

5 responses from the Newspage community

"Remote working could mean lenders take higher utility bills into account if you're using more energy working from home. However, that would be mitigated by reducing the cost of commuting to and from work, so the likelihood is that they'd cancel each another out. On that basis, it's unlikely we'll see a change in lenders' attitudes around affordability due to homeworking."
"While homeworking will mean higher energy bills, especially during the winter, the savings many make against the cost of commuting, buying lunch and the occasional coffee/sneaky beer after work must swing the cost pendulum in favour of working from home. Cost should not be the only consideration as homeworking does not suit every role or every individual's needs or circumstances."
"Remote working is more likely an overall boost to affordability for mortgage purposes than a problem. Lower travel costs, cheaper lunches, less chance of a lunchtime shopping spree, or drinks after work will more than offset a rise in other household bills. One area that people do need to be careful about with remote working is their insurance. Do they now have expensive IT equipment at home that used to be at an office? Do they have stock or materials at home? What about data security? Do customers visit the property? If you haven't had a chat with your insurance broker about the changes in your work/life patterns, I'd suggest you do it ASAP. You may find that you currently have no valid insurance, as many home insurance policies will not accommodate anything other than admin type work being done at home and commercial policies may not cover IT equipment in an employee's home, or require specific steps to be taken regarding security of data."
"No lender has openly come out and said that anyone working from home will be penalised due to potential higher utility bills as the majority will rely on ONS data for this. Could it change? Possibly, but it would be very hard to have a blanket policy as everyone's energy usage will be different and I can't see lenders adopting this approach anytime soon. It would impact new borrowers by reducing the amount they could borrower even further and, for existing borrowers, it could prevent them from borrowing more for home improvements if lenders did decide to change what they lend to home workers. My guidance would be to keep an eye on energy usage and how different it is before you were homeworking and also ensure you are using energy-efficient devices across the home. Also let's not forget how much people are saving by not travelling to the office, and lenders may also take that into account."
"With working from home being the new norm, and the rising costs of living, it's swings and roundabouts. Yes we have seen rising costs in heating and gas, but this will be balanced out with the savings on fuel for commuting. With that in mind, it isn't something I am gravely concerned about. However, what we are likely to see a little more of is a rise in the number of dads guarding the thermostat."