NC for this. Bit of background: I line manage an employee who is just finishing his probationary period. He's great, no issues with performance and we are happy to keep him on and he wants to stay. He is a junior team member, works in a non client facing role and since he started with us he has worked from home 3 days with 2 days in the office, which works for him and us, and we're happy for him to continue with that arrangement for the foreseeable future.
However he has just let me know that he is moving a 3 hour journey from the city where we are based, and going forward he wants to request that we pay for a co-working space in his town of residence where he can work for his "home working" days. The place he has found is NOT cheap, though I'm not sure of the going rate for such as everyone here either works from our (perfectly fine) office or from their home. He would still travel into the office for the 2 days a week.
The reason for him "needing" the co-working space is that he is moving in with his partner and child and there is "no space" there for him to work from home.
Not sure what to do in this situation. We have been happy to continue to accommodate hybrid working since COVID where it is the employees' choice, which seems to presume they have the space at home to work from home. We aren't a big business and we pay our employees decently due to the city where we are based, but this co working space is a fairly big overhead when technically he does have an office here should he need it.
AIBU to refuse this request to cover the cost of his "wfh" space? Happy for him to continue to wfh 3 days a week if he has the space and resources to do so, but he's now saying he doesn't! WWYD?