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September 27, 2024
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A warm welcome to the July 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
● New salary and reporting requirements for the Skilled Worker visa route, new Innovator Founder visa launched, and other key UK immigration updates for People leaders
● Bank of England raises base interest rate to 5.0%, its 13th consecutive rise and the highest level for 15 years - the impact this could have on home-hunting employees
● Australia and UK Youth Mobility visa scheme to be expanded, opening up opportunities for young job seekers - how UK-based People teams may benefit from the changes
● Council tax and the TV licence - full summary of these two living costs to share with relocating employees, to help them manage their moves and avoid unexpected fees
UK immigration policy changes have significant implications for People leaders, and keeping on top of the latest updates is crucial to navigate the complexities of hiring and retaining international talent. Here's PerchPeek’s roundup of key 2023 changes to keep you informed!
● Updates to Skilled Worker visa route - As of 12th April, the minimum salary requirement has been raised from £25,600 to £26,200 per year. There are also new requirements to report on hybrid working arrangements: while the place of work of sponsored employees has always had to be reported, sponsors must now specify to the Home Office when a sponsored employee will be working remotely full- or part-time.
● Youth Mobility Scheme expansion - This scheme is to be expanded for Australian and UK citizens - keep reading for a full summary of the changes further down (under)!
● Innovator Founder Route opened - The Start-Up and Innovator visa routes have closed and been replaced by a new three-year Innovator Founder Route, which opened on 13 April 2023 for those who have an innovative, viable and scalable business idea.
● Restrictions on student family members - In a bid to reduce record-level migration, the government has introduced a new curb affecting foreign postgraduate students. This restriction, to begin in January 2024, means they'll no longer be able to bring family members to the UK. Take a look at our last issue for more on this update.
● Changes for employers sponsoring offshore workers - There are new reporting obligations in place as of 12th April, including informing the UK Visas & Immigration department of the arrival date and departure date of employees in UK waters.
● Electronic Travel Authorisation scheme - The ETA is a digital permission to travel for those who don’t need a visa to come to the UK, similar to the ESTA scheme in the US. It will start to be rolled out in the UK from about November 2023, on a country-by-country basis. This is important to note as it’s a change in the process for foreign citizens who don’t require a UK visa to be able to travel to the UK. More information here!
Staying up-to-date with evolving immigration policies is essential for HR leaders to effectively manage international talent acquisition and compliance. Following the latest news means being able to proactively adapt strategies and stay compliant and competitive in a global workforce.
For more information on these immigration updates, reach out to PerchPeek here!
The impact of rising interest and mortgage rates in the UK extends beyond the housing market, also affecting those seeking rental properties. For HR leaders supporting relocating employees, being across these trends will help provide accurate guidance and support during moves. Here's a summary of the latest updates, and why these rate fluctuations matter.
Latest interest rate rise at a glance
● On 22nd June, the Bank of England raised its base rate from 4.5% to 5.0%
● It’s the 13th consecutive base rate hike since December 2021
● And the sharpest rise since 1989 - a jump of 4.9% percentage points over 18 months
● The base rate is now at its highest level since April 2008
What this rise means
For savers:
● It’s good news for people with savings as they’ll now be earning more interest.
● However, any boost in savings can’t keep up with inflation so consumers are still losing money in real terms
For homeowners and renters:
● It’s bad news for homeowners on variable or tracker mortgages whose monthly payments will now be increasing significantly
● There’s a risk for tenants that landlords will pass on this cost increase by putting rents up (except in Scotland, where this has been outlawed)
● New mortgage deals will now be too costly for many hopeful first-time buyers who’ll be forced to stay put, meaning even less rental supply
● In fact, a typical two-year fixed mortgage deal now has an interest rate of more than 6% for the first time since December 2022
● Some landlords may sell their properties to avoid rising mortgage payments, which again will affect rental property supply, of which there’s already a chronic shortage
Supporting relocating employees
In summary, rising interest rates in the UK have a direct impact on the rental market and employees searching for rental properties. As HR leaders supporting relocating employees, it's important to share the latest information and provide guidance and tips on securing properties.
In terms of current rental costs, at the moment we’re seeing average rental costs of £1,700 for a one-bed property and £2,100 for a two-bed around central London. If looking further out, cheaper options are available but this of course increases commute time and cost.
Following the new Australia-United Kingdom Free Trade Agreement that came into force on 31st May 2023, young people from the UK and Australia shall 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. Here’s a summary of the changes, and how HR and Talent Acquisition leaders can benefit!
What’s changing?
From 31st January 2024, the following changes will apply for Australian applicants coming to the UK on the Youth Mobility Scheme:
● The age limit will rise from 30 to 35 years old
● The maximum length of stay will be extended from 2 to 3 years
According to Australian Immigration Minister Andrew Giles, the changes will “deliver enhanced reciprocal pathways for young UK and Australian citizens to live and work in each country.”
These changes follow a similar agreement between the UK and New Zealand, as we reported in April. As of 29th June 2023, the following applies for young Brits and New Zealanders:
● The age limit for Youth Mobility Scheme visas has risen from 30 to 35 years old
● The maximum length of stay has been extended from 2 to 3 years
How can companies benefit?
The extension of the Youth Mobility Scheme will pose a great opportunity for UK-based People teams to address skills shortages and fill open roles by targeting Australia’s brightest young talent! It’s advisable to review relocation and compensation policies between now and January 2024 to stand the best chances of attracting top talent in the extended age bracket.
In addition, young Australians already in the UK by the implementation date will then be eligible to remain for an additional year, which adds to the pool of labour available to businesses. It also means Australians already in the UK workforce won’t have to be such temporary hires!
As an HR Leader supporting relocating employees, it’s crucial to be up-to-date on the latest rental market trends and utility costs, both to ensure that relocation and salary packages are adequate (and competitive), and to set realistic expectations with staff on how much it’ll cost to live in the UK.
However, PerchPeek’s experts report that there are a couple of UK-specific costs that tend to trip up new arrivals when they secure a new home - council tax and the TV licence. Here’s the lowdown on what they are and how much they cost, to share with your employees so they can get up and running quickly, with minimum fuss!
Council tax
What is it?
● Council tax is an annual fee that most UK households must pay to their local council
● This is separate from income tax and National Insurance, which are automatically deducted from an employee’s salary
● Council tax helps to fund local services such rubbish collection, parks and street lighting
● Employees may find out which is their local council by entering their postcode here
How much is it?
● The amount depends on the value of your property (this is organised into ‘bands’ between A and H - more info here) and the area in which you live
● However, most UK households would be advised to budget at least £100 per month
● Single-occupancy households get a 25% discount on their council tax
● Council tax is payable via monthly direct debit, or can be paid annually
TV licence
What is it?
● This is a fee that all UK households must pay to watch or record live TV on any channel
● It’s collected by the national broadcaster, the BBC, to fund its programming
● There is one fee payable per household, regardless of the number of occupants or TVs
● A TV licence is not required if residents only watch streaming services or on-demand TV
How much is it?
● In 2023 the TV licence costs £159 per year, and can be paid by monthly direct debit
Sharing this information with relocation employees means they’ll be well prepared for the costs involved in living in the UK, and won’t be hit by unexpected bills - meaning they’ll feel more relaxed and on top of their move and their finances, improving employee satisfaction!
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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We hope you found this update insightful! We’d love to hear your thoughts.
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