A warm welcome to the April issue of PerchPeek’s UK Market Monthly update!
Here’s where you’ll find the hottest updates around employee relocation and international talent strategy, insights from our experts on housing and cost-of-living news affecting your staff, the latest trends in global mobility, and tips and tricks on ways to support your teams.
A fly-by summary
● Good news for companies targeting foreign talent: the UK has shot up the OECD list of most attractive countries for highly skilled workers from abroad, ranking in the top 10
● The number of available UK rental properties has fallen by a third in the last 18 months, and demand for homes is over 50% above normal levels according to Zoopla
● New Zealand and UK Youth Mobility visa schemes are to be expanded, opening up more opportunities for young people to live and work on the other side of the world
● The Bank of England has announced there should be a sharp fall in inflation during the course of 2023, easing the cost of living crisis, and interest rates are also set to fall
● UK residents are looking forward to three Bank Holidays in May - PerchPeek’s top tips for helping relocating staff avoid travel issues and make the most of the time off!
When it comes to global mobility, there’s good news both for highly skilled workers looking to relocate to the UK, and British-based Talent Acquisition teams looking to fill skills shortages!
The UK has rapidly climbed up the Organisation for Economic Co-operation and Development (OECD) ‘talent attractiveness’ list of countries that are most appealing to highly skilled workers, thanks to migration regime changes introduced after Brexit.
These changes, designed to make recruitment of highly qualified foreign nationals easier, have been described as “the biggest shake-up in half a century”.
Now ranking in the top 10, ahead of the US, and behind smaller countries like Australia and New Zealand that have long benefited from migration as a workforce boost, the UK has shot up the ranking faster than any country since 2019.
According to the OECD, reasons for this sudden rise include:
● The abolition of the UK’s previous quota for highly skilled workers
● Offering more generous post-graduation visas for international students
● In 2022, net migration to the UK reached a record high of 504,000
● There are 3.4 million migrant workers in the UK who have a tertiary education - this figure has doubled since 2010
● In this time, this group has risen from 16% to 23% of the graduate workforce
This rise in the OECD’s rankings provides compelling evidence that Talent Acquisition and People teams should see foreign talent as a great opportunity for filling open roles in the UK, particularly when it comes to roles requiring highly skilled professionals.
UK rental market update
Key insights at a glance:
● Average rental prices in London have risen by 14.3% YoY as of March 2023
● The average monthly rental cost of a property in London is £2,193
● Looking at the UK as a whole, rents rose 4.7% in the 12 months to February 2023 (latest figures released by the Office for National Statistics)
● This is the largest annual percentage change since January 2016
Minimum rental costs - Q1 2023 (source: PerchPeek):
For rental cost data for other UK regions, give PerchPeek a shout here!
In the news
The number of homes available to rent in the UK has fallen by a third over the past 18 months. Letting agencies generally have 10 available rental properties at a given time, compared to 16 before September 2021, and demand for rental properties has risen to more than 50% above normal levels (BBC News, using Zoopla data).
To support relocating employees looking for a home, knowledge is power! It’s important to make sure they know how to stand out from the crowd at a viewing and put together a compelling rental application, in order to succeed in an incredibly competitive market.
Young people from the UK and New Zealand will soon be able to benefit from expanded visa schemes, allowing more of them to travel and work on the other side of the world for longer!
From 29th June, the following changes will apply for New Zealand applicants coming to the UK on the Youth Mobility Scheme:
● The age limit will rise from 30 to 35 years
● The maximum length of stay will be extended from 2 to 3 years
In the words of UK Immigration Minister Robert Jenrick:
“From this summer, more young Brits and New Zealanders will have the chance to make lasting connections, develop skills and make a significant contribution to their host country’s society.
The changes we are announcing today will further strengthen the close ties between the UK and New Zealand, and benefit both countries economically, socially and culturally.”
How can companies benefit?
The extension of the Youth Mobility Scheme poses a great opportunity for UK-based People teams to look to address skills shortages and fill open roles by targeting New Zealand’s brightest young talent! Young New Zealanders already in the UK by the implementation date will now be eligible to remain for longer, which adds to the pool of labour available to businesses. It also means New Zealanders already in the UK workforce aren’t such temporary hires!
PerchPeek takes a look at two key news updates to share with employees, showing there’s hope on the horizon for UK residents struggling with soaring inflation and the cost of living.
Cost of living set to ease
After inflation rose to 10.4% in February, the Governor of the Bank of England has announced there should be a sharp fall in inflation during the course of 2023, easing the cost of living crisis.
What this means for staff - As prices for everyday essentials have shot up in recent months - with households paying a whopping £811 a year more on grocery bills compared to one year ago - any easing in the cost of living will come as welcome news!
However, it’s likely to take some time for these positive changes to be felt. In the meantime, it’s a good idea to share cost-saving ideas with staff - take a look at our last issue for inspiration!
Interest rate expected to fall
The Bank of England has raised the interest rate several times lately, taking it to 4.25% - the highest level since 2008. However, it’s been predicted that this will drop to 2% by 2025.
What this means for staff - Interest rates falling is bad for savers, but good for borrowers. Over the last year, mortgage payment rates have risen significantly, having a knock-on effect on the rental market. Many hopeful buyers can’t afford a mortgage and stay put in their rental property, putting increased pressure on a market where demand already outstrips supply.
If the Bank of England interest rate falls, this means getting a mortgage will once again be within reach for more people. This should hopefully have a positive effect on rental property supply.
It doesn’t seem like long since the four-day Easter weekend, but those working in the UK don’t have long to wait until the next round of bank holidays - and this year, there’s one extra one!
When are the May bank holidays?
● Monday 1st May - Early May Bank Holiday
● Monday 8th May - Bank Holiday for the Coronation of King Charles III
● Monday 29th May - Spring Bank Holiday
Helping employees make the most of their holidays
For relocating employees new to the UK, they might not be familiar with common travel precautions and advice around bank holidays. Plus this year, the extra bank holiday is new territory for most (as the last coronation was in 1953!) so for people based in London, they’ll want to make sure they’re aware of any important updates. Here are PerchPeek’s top tips!
● Bank holiday weekends are a popular time to get away for a short break. Employees planning to travel by road or public transport should avoid Friday evening rush hour, and if travelling on Saturday morning, set off as early as possible.
● The Spring Bank Holiday coincides with the start of half term for many UK schools. As well as roads and transport options being very busy, this also means that prices for flights and holiday accommodation will be higher than usual.
● The coronation of King Charles will take place on Saturday 6th May. Employees in London should be aware that the Tube and other public transport services, and the streets of central London, will be extremely busy, so it might be best to avoid them!
We hope you enjoyed this month’s update!
If you have any feedback, comments or questions about what's happening in your location, feel free to reach out via the form at the bottom of this page.
Thanks for reading, and see you next month!
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