For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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A warm welcome to the June 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
● UK inflation fell to 8.7% in April, but food prices are still soaring, up +19.0%, leading to calls for supermarket price caps - how this affects employees, and how to support them
● Ban on ‘no-fault evictions’ tabled in Parliament, and high interest rates pushing landlords to sell up, increasing pressure on rental supply - what this means for relocating staff
● Energy bills to be capped at £2,074 per year as of July, down from £2,500, reflecting recent falls in wholesale energy prices - key cost of living news to share with employees
● UK government introducing new curbs on immigration, meaning foreign students will lose the right to bring their families to the UK - how this may affect the talent pool
The latest figures from the Office for National Statistics (ONS) state that consumer inflation in the UK has dropped to 8.7% as of April, down from 10.1% in March - however, food prices remain extremely high. Naturally, this is having a massive impact on UK households. Here’s what you need to be aware of when supporting employees struggling with soaring living costs.
April’s dip in inflation is due in part to slower rises in energy bills, thanks to a fall in wholesale energy prices. It’s the first time that inflation has been under 10% since August 2022. It’s important to note however that this decrease doesn’t mean that prices are coming down; it means they’re still rising, just not as quickly as they have been over the past several months.
Yet, food inflation is still extremely high. As of April, food prices are up a massive 19.0% YoY, hardly changed from 19.1% in March. In fact, this puts the UK’s food inflation at the highest level in the G7, having overtaken Germany which had held the ‘top spot’ and is now at 16.8%.
According to research firm Kantar, the UK households are now paying on average £833 more per year on groceries compared to the previous year.
In light of this trend - the fastest rate of food inflation growth in nearly 45 years - the government is discussing plans for supermarkets to introduce a cap on the cost of basic food items.
PerchPeek insights
It’s heartening to see consumer inflation finally falling below 10% after many months of the cost of living crisis, and that energy bills are beginning to fall (keep reading for more on this!).
However, food inflation is still worryingly high, and despite calls to introduce supermarket price caps, in reality there doesn’t appear to be any indication that prices will fall in the near future.
It’s important to keep in mind that relocating employees new to the UK are unlikely to be familiar with the many nuances of British supermarket shopping! In particular, junior staff will be keen to know where to snap up the best deals and make their budget stretch further.
To support your staff, why not share PerchPeek’s top tips for saving money on food in the UK?
PerchPeek aims to keep HR and People Leaders up-to-date on the latest UK rental market trends, to help you shape your relocation strategy and support your teams! Read on for a summary of current rental prices and news stories affecting relocating employees.
UK rental market update
Key insights at a glance (source: ONS):
● Average rental prices in London have risen by 5.0% YoY as of April 2023 - ONS data
● However, the London Renters Union reports on rent hikes of up to 20% YoY
● Rental prices across the UK rose 4.8% in the 12 months to April 2023 - ONS data
● The rise in rents comes as property ownership has become increasingly expensive, following a sharp increase in borrowing costs (source: Financial Times)
● The average interest rate for new mortgages rose to 4.4% in March - highest since 2008
Minimum rental costs - Q2 2023 (source: PerchPeek):
For rental cost data for other UK regions, give PerchPeek a shout here!
In the news
● A ban on ‘no-fault-evictions’ - meaning landlords cannot lawfully evict tenants without justification - has been tabled in Parliament, as part of wider reform of the rental sector
● The Royal Institution of Chartered Surveyors (RICS) reports that high interest rates are putting pressure on landlords, pushing some to consider selling up
How to support home-hunting employees
The no-fault eviction ban will be good news for staff already renting; it’ll offer more stability and security, knowing their tenancy can only be ended in exceptional circumstances. HR Leaders should make sure employees know their rights and review contracts thoroughly before signing.
For those looking to rent, however, it’s looking increasingly plausible that the growing restrictions on landlords will prompt them to sell up. In addition to the issue of landlords retiring (see our last issue!), this puts a lot of pressure on a rental market already suffering from insufficient supply.
To support relocating employees looking for a home, offering guidance is key! 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.
Back in March we reported that the Energy Price Guarantee, which caps household energy bills at £2,500 per year, had been extended for an extra three months until 30th June 2023.
What happens from 1st July?
The UK energy regulator Ofgem has now announced a new energy price cap for the period 1st July - 30th September 2023. This means that during this period, energy bills will be capped at £2,074 per year per household for dual fuel (gas and electricity).
This reduction of the quarterly price cap reflects recent falls in wholesale energy prices. It’s also worth noting that the current Energy Price Guarantee of £2,500 will remain in place as a safety net until the end of March 2024, should energy prices increase above £3,000 per year.
Ofgem notes that while the price cap has dropped from its winter peak of £4,279, it remains well above the pre-2021 average, and many people will still find such high bills difficult to pay.
PerchPeek insights
Of course, we’re getting into the summer months and the weather is (finally) warming up, so consumers will naturally be using less energy for heating. Nevertheless, this news should come as a relief to any employees concerned about bills increasing since the Energy Bills Support Scheme (providing a £300 discount over six months) came to an end in the spring.
Here are PerchPeek’s tips for helping relocating employees manage their energy bills:
● Where needed, help new arrivals set up utilities and select a cost-effective tariff
● Offer advice on shopping around for deals on sites like Uswitch and MoneySuperMarket
● Share tips and tricks for energy-saving, such as running appliances at off-peak times
A new restriction on UK immigration has been introduced, and it’s one that’s important to know about if you’re an HR or Talent Acquisition professional. Taking a view of the longer term, it could have a big impact on the UK talent pool. Read on for the full details!
In a bid to reduce record-level migration, the UK government has introduced a new immigration curb affecting foreign students on non-research postgraduate courses. This restriction, to begin in January 2024, means they'll no longer be able to bring family members to the country.
The number of applications for dependant visas has risen significantly over the last few years, since rules were changed in 2019 to allow students from overseas to stay in the UK for two years after graduating to look for work.
Facts and figures
● In 2022, 135,788 UK visas were granted to dependants of foreign students
● This was up from 54,486 in 2021, and nearly nine times the 2019 figure
● UK immigration was estimated at 1.2 million in 2022
● Net migration reached 606,000 in 2022, a record figure but lower than expected
● This was 164,000 more people than in 2021
PerchPeek insights
This news brings up an interesting paradox - after having reported in our last issue that the UK is now one of the most accepting countries for workers from abroad, we’re now seeing that the government is looking for measures to reduce migration in the short term via new curbs.
For Talent Acquisition Leaders, it’s worth considering the notion that preventing foreign students from bringing their families may discourage them from choosing the UK as their country of study. And this would of course have an impact on the local talent pool, further down the line.
In light of these updates, and with ongoing skills shortages, there’s even more of a need for employers to look abroad for prospective candidates. To facilitate this, it’ll be crucial to have a well thought out relocation policy in place, to be able to attract the top talent.
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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