The Bank of England said working from home is helping lift house prices in the U.K. by making consumers willing to pay more for space. Deputy Governor Ben Broadbent said the recent surge in property prices reflects a shift in preferences for bigger houses, since more consumers expect to need office space at home. Governor Andrew Bailey said a proliferation of high loan-to-value mortgages also is helping consumers afford to pay more.
The remarks suggest longer-term forces propping up Britain’s red-hot property market as the U.K. economy recovers from its worst recession in three centuries. Much of the strength in the market has been attributed to a tax break on purchases that’s now started to unwind, but the BOE officials see structural factors as providing firmer support.
“People have worked more at home and expect to work more from home,” Broadbent said in a web event with the BOE’s regional agents on Friday. “Space at home becomes more valuable, and in particular, space at home outside city centers becomes more valuable.”