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So, let’s talk about offices. Specifically, what’s going on with them in the UK right now. You’d think with everyone working from home, or at least dipping their toes into a hybrid setup, that commercial leasing would be in the toilet, right? But the numbers paint a picture that’s a bit more complicated, and frankly, a lot more interesting than just saying “remote work killed it.”
The Take-Up Numbers: A Surprising Surge
Let’s dive straight into some of the data. Back in Q2 of 2025, according to CBRE UK, office take-up in the UK actually hit a pretty decent 20.3 million square feet. You know what’s wild about that? It was the highest it had been in three whole years. Three years! This happened even though, and this is the kicker, plenty of people are still preferring to work remotely. It makes you scratch your head a little, doesn’t it?
And it’s not just that one report. Allwork.Space in July 2025 also noted this trend, talking about a 27% jump in UK office investment. Think about that growth in investment while also hearing about people loving their home offices. It really does seem to be defying what you might expect. They mentioned that flexible offices and coworking spaces are playing a big role in this demand, which makes sense – not everyone wants a big, traditional corporate setup anymore.
Vacancy Rates: A Mixed Bag
Now, let’s look at vacancy rates. Vacancy is basically the amount of office space that’s sitting empty. For a while there, it was creeping up. But then, in Q1 of 2025, something interesting happened. BM Magazine reported that the national office vacancy rate actually fell! It dropped to 8.6%, and get this, it was the first time it had gone down since way back in 2020. They even said that companies were moving into more office space than they were leaving. That’s a significant shift.
Apparently, some of the older, less desirable office buildings are being repurposed, and there hasn’t been a ton of new office space built recently. So, that limited new supply, combined with companies reassessing their needs, could be pushing down those vacancy numbers, at least for certain types of spaces. It’s not like every old building is suddenly in high demand, mind you, but the overall picture is shifting.
However, it’s not all good news everywhere. If you look at London specifically, the story is a bit different. Data from K2 Space in early March 2025 showed that vacancies were actually at a 20-year high. We’re talking 10.6% empty space, which is almost double what it was before the whole pandemic thing kicked off. They directly linked this to people shifting to hybrid work models. So, while the UK as a whole might be seeing some improvement, the capital is dealing with its own set of challenges.
Across the pond, so to speak, in Europe, the picture is also a bit mixed. Savills Spotlight in Q2 2025 noted that European office vacancy rates went up a touch, about 20 basis points, to 9.1%. And this report included the UK markets, so it’s an indicator that these hybrid trends are still heavily influencing things on a broader scale.
The Remote Work Factor: It’s Complicated
Let’s get real about remote work. It’s not going anywhere fast. A Forbes UK poll from October 2025 is pretty stark: out of 1,100 people surveyed, a huge 63% were working remotely either all or part of the time. That’s a massive chunk of the workforce. You’d think this would automatically mean less demand for office space, and for some types of space, that’s probably true. But as the numbers above show, it’s not a simple one-to-one relationship.
What seems to be happening is that companies are rethinking what they need from an office. They’re not necessarily ditching offices altogether, but they are looking for better quality, more strategically located spaces. Grant Thornton touched on this, pointing out that demand is actually outstripping supply for prime office space. This means the really good stuff – well-located, modern, amenity-rich offices – is still in demand, even if older, B-grade stock is struggling.
It also seems like companies are consolidating. Instead of occupying multiple smaller offices, they might be taking on one larger, more modern space that better suits their hybrid work model. This can lead to higher take-up in specific areas, even as the overall percentage of people working remotely remains high.
Office Occupancy: Coming Back?
Here’s another interesting tidbit. Remit Consulting’s Resource Centre reported in 2025 that average office occupancy across the UK had reached its highest point since the start of remote work. Think about that: five years after the initial lockdowns forced everyone home, more people are actually going into the office. This doesn’t necessarily mean a full five-day-a-week return, but it does suggest a gradual shift back, or at least a stabilization.
This increased occupancy could be driven by return-to-office mandates from some companies, or simply by employees realizing the benefits of having a dedicated workspace and the social interaction that comes with it. Some folks might see it differently, arguing that “highest point” is still relatively low compared to pre-pandemic levels, and that’s a fair point. But it’s a positive trend for the office market that wasn’t necessarily predicted a couple of years ago.
Central London vs. The Rest
We already touched on London’s vacancy rates being high, but let’s look at take-up there too. CBRE UK Insights for Q2 2025 reported that Central London office take-up was 2.9 million square feet. That’s up a solid 28% from the previous quarter. This is seen as a sign that things are normalizing a bit, especially with those return-to-office pushes.
So, you have London with high vacancies but also accelerating take-up. It suggests a churn is happening – older spaces might be becoming vacant as companies move into newer, better locations. It’s not necessarily a sign of the office market dying, but perhaps a significant reshaping of it, with demand focusing on the best-in-class properties.
So, Is Remote Work Killing UK Commercial Leasing?
Based on the data, the answer is a pretty resounding “no, not entirely.” It’s more nuanced than that. Remote and hybrid work have definitely changed the game. They’ve increased vacancy in older buildings, put pressure on landlords to offer more attractive spaces, and are making companies rethink their absolute space requirements. You see that with the 20-year high vacancies in London, which is directly tied to hybrid work shifts.
But at the same time, the overall UK office market is showing resilience. Take-up is up, investment is growing, and vacancy rates are falling in some areas. Demand for prime office space is strong, and office occupancy is at its highest in years. This suggests that while the way we use offices is changing, the need for them hasn’t disappeared. Businesses still need places to collaborate, innovate, and attract talent. And for many, that still means a physical office, just perhaps a different kind than before.
It’s a fascinating time to watch the commercial property market. Things are clearly in flux, adapting to new work patterns. The data from sources like CBRE UK, Allwork.Space, and BM Magazine all point to a market that’s adjusting rather than collapsing.
Frequently Asked Questions
Is office demand still high in the UK?
Yes and no. Overall demand has shifted, with a strong preference for prime, modern, and well-located spaces. Data from reports like Grant Thornton show demand outstripping supply for these types of properties, even as hybrid work is prevalent.
What is the current office vacancy rate in the UK?
According to BM Magazine in April 2025, the national office vacancy rate fell to 8.6% in Q1 2025, the first decline since 2020. However, London is an exception, with vacancies hitting a 20-year high of 10.6% in early 2025, as reported by K2 Space.
How has remote working affected office leasing?
Remote and hybrid working have made companies more selective about their office space. It’s led to increased demand for flexible options, coworking spaces, and high-quality offices, while older or less desirable stock faces greater challenges. This is reflected in the Savills data showing continued influence of hybrid trends across European markets.
Are people returning to offices in the UK?
Yes, office occupancy has reached its highest point in five years post-lockdown, according to Remit Consulting. This doesn’t necessarily mean everyone is back full-time, but it indicates a trend towards increased physical presence in workplaces.
Takeaways
It’s pretty clear that the UK commercial leasing market isn’t simply collapsing under the weight of remote work. It’s evolving. Companies are still leasing space, and investment is happening, but the focus is definitely shifting. If you’re involved in commercial real estate, or even just curious about how work is changing our cities, it’s definitely worth keeping an eye on these trends. What will the office of the future really look like? We’re still figuring that out, but the data gives us some pretty interesting clues, wouldn’t you say?
