For many Britons home is where the work is. The number of people working self-employed at home is expanding at five times the rate of employment overall, figures released exclusively to the Financial Times show.

Self-employed people who work from home have been the fastest-growing sector of the British workforce since 2001, according to research by Live Work Network, a specialist consultancy on home-based business. Overall, the British workforce grew a relatively modest 4.8 per cent between 2001 and the end of 2010. However, the number of self-employed homeworkers grew 24 per cent in the same period. There are now 2,346,365 Britons running a business from home, equivalent to one in 12 of the national workforce, according to the Live Work Business Briefing 2011.

The briefing, the first of its kind, will be published yearly by the Live Work Network. The results are based on Office for National Statistics analysis of homeworking trends in its Labour Force Survey.

It shows that the number of people working from home has grown 21.4 per cent since 2001. Today, 3,744,451 people work from home, nearly 13 per cent of workers.

“Seven in 10 homeworkers run their own businesses,” says Tim Dwelly, director of the Live Work Network. “They don’t see pension benefits at work, don’t get a share of company profits, so they decide to keep the value of their intellectual property to themselves. And there is an aversion to commuting.”

Technological developments like broadband, combined with lower costs and eco-friendliness, are added attractions, he says.

Employee homeworker numbers are rising because of employer pressure. “What used to be an employee asking to work from home has moved to ‘You have to work from home,’” says Dwelly.

The south-west has the highest proportion of its workforce working from home, 16.9 per cent, followed by the south-east, 15.2 per cent. Property analysts say the high proportion of homeworkers in south-west England is linked to commuting distances to big cities. Lucian Cook, director at Savills Research, says: “There are higher levels of homeworking in areas that are outside of the core commuter zone. In the prime markets, levels are particularly high in the likes of Devon, 18.9 per cent, Dorset, 14.1 per cent, and Norfolk, 16.8 per cent.”

Robin Gould, director at buyers agency Prime Purchase, says more purchasers want to leave the city behind and commute as little as possible.

Many homeworkers operate from a designated space in the home. Others, especially those employing staff, prefer a live/work unit – a residential property with workspace attached. These can attract business rates and capital gains tax, and some are liable for VAT. A benefit is that the business part can attract 100 per cent relief on inheritance tax.

Demand for home-based workspace is growing, because the idea of working at a separate location is outmoded, says Dwelly. “The separation of work and home is a product of the industrial revolution,” he says. “It was needed to keep homes away from the smell and noise of factories. The industrial revolution is long gone yet we still seem to be applying its assumptions to the office economy. But the office economy is now on the wane.”

Pressure for change is growing. Ed Lewis, head of London new homes at Savills, says: “We are advising developers to build in a work station for pc, printer and so forth, similar to having a hotel work area in your room.”

Increased demand for live/work units and homes with workspaces is catching up with the technology that makes homeworking possible. Half of British households have broadband, and products such as Skype, BlackBerry, smart phones and tablet computers make it easier to work at home.

Prime residential property developers pay most heed to clients’ demands. Oakmayne Bespoke puts home offices into all its £10m-plus properties. Offices are included at houses in Cornwall Terrace, Regent’s Park, north London, which have been refurbished by Oakmayne Bespoke. Number 11, an 8,800 sq ft home with an attached mews house, is on sale through Knight Frank. The guide price is £29m.

In the countryside, outbuildings are often converted into workspaces. Park Farm near Malvern, Worcestershire, is on offer through Knight Frank for £2.5m. The vendor runs his television company from its 5,479 sq ft converted barn.

Live/work units under construction include 20 “home office apartments” at OneSE8, a mixed-use scheme by St James Homes in Deptford, south-east London. Prices start from £273,995.

Not everyone thinks developers need to create more workspace in homes. Publicist Catherine Raynor works in her bedroom in south London. At the end of the day her equipment goes into a cupboard. “For years those who have more rooms than people to sleep have called the smallest bedroom the study,” she says. “A home office is just a different word for the same space.”


Home alone: Is it for you?

Working from home is not for everyone. “It depends on the type of person,” says psychologist Dr Almuth McDowall, “It can be a lonely experience. You need to be organised and tolerant to stress because if an intricate project goes wrong at home, then a person can take it very badly.”

Some people find self-managing their time stressful while others enjoy it, especially those with families, says McDowall, a lecturer at Surrey University who specialises in work-life issues. “You can be more flexible about your day but you need to set boundaries with your family,” she says.

Work hubs cam help self-employed homeworkers network and counter isolation. Operating like private clubs, they provide shared equipment and workspaces.

As for employee homeworkers, McDowall says working from home can slow career paths, because staff are not seen doing their jobs. She advises they visit colleagues regularly.


Buying guide


Live Work Network tel: +44 (0)870 990 5151,

Live Work Homes tel: +44 (0)845 324 5717,

Savills tel: +44 (0)20 7499 8644,

Knight Frank tel: +44 (0)20 7629 8171,

St James tel: +44 01372 364500,

Oakmayne Bespoke tel: +44 (0)20 7629 8171,

Oliver Burns tel: +44 (0)1727 814 170,

Prime Purchase tel: +44 (0)1962 745 035,

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