🦜 PerchPulse - UK Market Update July 2022 🦜

A big feathery welcome!!‍

Hello and welcome to PerchPeek’s July 2022 UK Market Update! As relocation experts, we keep as up-to-date as possible on international market trends and factors influencing HR leaders, their teams and their employees, and we've brought this insight into a monthly newsletter.

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Fly-by summary:

• This summer, the UK government is making changes to immigration rules which include introducing new VISAs as well as updating existing routes to attract top talent and address concerns about labour shortages.
• Inflation has soared in the UK - four times the government targets - and the UK has had the highest cost-of-living increase in the G7 in 2022.
• The economy is facing significant pressures with the energy crisis, global supply chain issues and a worker shortage. Companies are expected to raise their prices even more over the rest of this year. ‍‍‍

Talent & Migration - Speedier access to UK VISAs!

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The UK government has issued a new Statement of Changes to the UK Immigration Rules, with new rules aimed at allowing more highly-skilled workers into the country. The changes introduced new Global Business Mobility, High Potential Individual and Scale-Up VISA routes.‍

5 VISA routes were created, designed to make it easier and faster to progress through.

1. Graduate Trainee - replacing Intra-Company Graduate Trainee route.
2. Secondment worker - a new route for temporary workers in UK.
3. Senior or Specialist Worker - replacing the Intra-Company Transfer route.
4. Service Supplier - replacing the contractual service supplier and independent professional provisions in the Temporary Worker – International Agreement route.
5. UK Expansion Worker-  replacing the Sole Representative of an Overseas Business visa category. ‍

In addition - 2 further new visa routes were made:

1. High Potential Individual (HPI) route - allowing recent graduates from top 50 universities globally to come unsponsored to the UK for 2 years.
2. Scale-Up Visa - allowing those with a job offer at a required skills level and with specific company criteria, to apply for a fast-track visa.

How can this help me?‍

Given how hard talent has been to access from sources such as the EU since Brexit, getting up to date on these new options for talent coming to the UK could be a great way to broaden your access to good people!‍

Housing & Cost of Living - UK hit hardest in G7

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In March 2022, 87 percent of households in Great Britain reported that their cost of living had increased in the previous month, and according to 2022 statistics, the UK has had the highest cost-of-living increase of all G7 nations (UK, USA, Canada, France, Germany, Japan, and Italy)!‍

The inflation rate in July  is already at a hefty 9.1% and the Bank of England has said it would peak at slightly above 11% in October, when regulated household energy bills are due to rise again. ‍

The Energy Spike‍

Energy regulator Ofgem increased the energy cap by a record 54% from April 1st, meaning the energy bill price cap rose £693 for approximately 22m households. It’s feared this will get worse in October when the next cap is brought in, and worse still in 2023. The government is taking action to try and support the most vulnerable.

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Housing and rental

Sadly, things aren’t getting cheaper on the home-owning front either. Buying a home in the UK is getting more and more expensive. Between the start of 2020 and the first quarter of 2022, average house prices rose by 16.8% compared to a 2.7% average growth in income, making home-owning less accessible for new buyers.

• Prices rose by 0.9% in May, taking annual house price growth to 11.2%. Month on month price growth has been softening since the start of year, down 0.9% this month from 1.7% in February.
• Rents grew 11.4% in the 12 months to April across the UK, according to Zoopla. This was a record for annual rental growth since 2011, however month on month growth is slowing.

PerchPeek standard rental rates in London (not including zone 1):

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Business & Economy - Businesses facing tough tasks

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Unfortunately, some significant challenges face UK businesses in the coming months - on talent, energy prices and materials.‍

Shortage of workers: 15% of UK businesses reported that they were experiencing a shortage of workers in early June 2022; this was higher than in May this year (13%) and has continued to rise since January 2022 (10%).‍

Shortage of materials: In summer 2022, 19% of businesses currently trading reported that they were either unable to get the materials, goods or services they needed from within the UK, or had to change suppliers or find alternative solutions to do so; the construction industry reported the largest proportion of this at 33%.‍

Increase in energy prices In early June 2022, a third (33%) of businesses reported that their production and/or suppliers had been affected by recent increases in energy prices. 26% said their output levels were lowered due to these disruptions and 33% said their outputs had been delayed due up supply chain issues caused by higher costs associated with fuel usage.

These challenges aren't going to disappear overnight, so try to stay aware. If you sense a tense atmosphere in some boardrooms, it might not just be the agenda items!‍

Conclusion‍

Going into Q3 of 2022 the United Kingdom has tough challenges ahead, for businesses and people. By talking to employees and staying close to their problems, companies have a great opportunity to show their support to their best people and inspire loyalty and gratitude in difficult times. Try to take advantage of new VISA schemes in order to attract and retain the best people at your company!

Thanks for reading!

Questions About Moving Employees or What We Do At PerchPeek?

No matter where your business is located, or how many employees you have to move, the relocation experts at PerchPeek are standing by at all times to answer any and all questions that you may have about moving and taking care of your most important business asset, your team! Feel free to reach out for a call with us or book a demo to see exactly how PerchPeek can work for you and your teams!

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