UK's Flexible Office Market in 2024: A Detailed Report on Prices, Trends, and Cost Insights

The UK's office culture is transforming, with the traditional concept of 'office space' evolving into a more fluid and adaptable model. Once characterised by the fixed leases of Central London and major regional cities, the office sector is now embracing flexibility. This metamorphosis, accelerated by the pandemic, has seen the office market adapt to the demands of a modern workforce.

Desk cost dynamics

Top tier cities and towns

Cities and towns beyond London have witnessed shifts in average desk costs, underscoring the rising demand for flexible workspaces in these locales. Reading, Aberdeen, and Cambridge are at the forefront of this trend in 2023. The Elizabeth Line has extended to Reading, enhancing its accessibility and desirability. Reading recorded a significant uptick in desk costs, with prices climbing from £190 in 2020 to £309 in 2023.

Milton Keynes is gaining traction, thanks to its easy commute to London and the recent introduction of new flexible work centres.

Aberdeen displayed strong growth, with rates rising from £200 in 2020 to £304 in 2023.

In Cambridge, the burgeoning tech scene, coupled with the launch of new flexible work centres, has underpinned its strong market performance.

Other cities, like Nottingham are emerging as a contender with growth in available flexible workspace, recording a notable growth over the past three years.

Leasing insights

Lease Terms and Time from Initial Enquiry to Move-in central London

Lease fluctuations

2021 saw a spike in lease duration compared to the previous year, but by 2023, the figures have realigned closer to the 2020 numbers.

Swift transitions

The diminishing lead time from signing to moving in is similar to Central London's trend. The time from lead to move-in in the regional cities has decreased from 64 days in 2021 to 55 days in 2023, underscoring the sector's efficiency across the UK compared with traditional leases.

Lease Terms and Time From Lead to Move-in in Key Regional Cities

Major UK cities have seen the length in both flexible and traditional leases diverge from those in London. The average lease term in days for flexible office space for major cities outside London was similar in 2020 and 2023, with 365 days and 366 days, respectively. Occupiers are increasingly motivated to secure the best spaces for extended periods due to the limited availability in most major cities.

Supply in the regional cities

Regional towns and cities

The Big Six regional cities (Manchester, Birmingham, Bristol, Leeds, Glasgow and Edinburgh) accounted for 58% of the total new flexible centres outside of London since 2021.

Emerging hotspots

Nottingham and Reading have seen a significant uptick in desks per deal in 2023 compared with 2020, suggesting both cities are emerging as new hotspots for flexible workspaces.

Conclusions

Central London has witnessed growth in flexible workspace pricing, with areas like St James's, Mayfair, and Shoreditch leading the charge. The significant price surges in these districts from 2020 to 2023 highlight the increasing demand for premium, flexible workspaces. However, it's essential to note the challenges. While some areas have seen a surge in demand and pricing, others, like Aldgate/Whitechapel and Liverpool Street, have experienced a decline. These fluctuations emphasise the importance of understanding local market dynamics and the factors influencing demand.

The occupier landscape in Central London has remained similar to three years ago, with Financial Services taking a dominant position. The continued demand from those occupiers, suggests that businesses across sectors recognise the benefits of flexible workspaces. Beyond the capital, other significant cities in the UK are also seeing a marked interest in flexible workspaces. The data indicates that while Central London remains a dominant player given its overall size relative to the regional markets, cities/towns such as Reading, Aberdeen, and Cambridge are carving out their own significant niches in the flexible workspace sector. This suggests a broadening of demand, with regional hubs increasingly becoming focal points for businesses seeking adaptable office solutions.

In the broader context, the pandemic has undeniably acted as a catalyst, accelerating the transition towards flexible workspaces. As businesses prioritise adaptability, cost-efficiency, and employee well-being, the demand for flexible workspaces is poised to grow further.

Continue reading our report on UK’s flexible office workspace here.

This report delves into flexible workspaces across the UK, examining key drivers such as cost per desk, deals per desk, lease lengths and supply in Central London and other significant urban hubs. The report has been written in collaboration with Carter Jonas, one of UK’s leading property consultancies, enabling deeper insight and analysis into the sector.