Even as of now, the rule of law is that the person will be working from the office unless the nature of work requires otherwise or it is so stated in the appointment letter.
So if you want to allow work from home, it should be specified in the appointment letter, and limits/conditions should also be specified in it.
The terms in the appointment letter become fixed, so instead, you can say that the WFH rules will change from time to time in line with the requirements of the business and then put the conditions and allowances in the Employee handbook.
Going ahead, I think it should be put in the standing orders. But remember that any change in the WFH rules will probably amount to a change in terms of employment and will need the concurrence of employees. You cannot make unilateral changes.