UK house prices play a huge role on where someone live, work and raise their family, luckily we live in a country where we a free to choose and move where want when we want. This is also vital to our economy as ‘employment mobility’ allows companies to recruit the employees with the right skills and talents they require regardless of where they currently live.
I said earlier UK house prices are a major factor in employment mobility, as we become a nation of private renters, with some many first-time buyer unable to afford the high UK house prices we are currently experiencing, this places even more demand on the private rental sector.
The recent boom in the private rental sector, regardless of the recent changes to stamp duty and tax, should create a world where anyone can move to any major city or town in the country easily. Unfortunately as UK house prices rise, so does rent, with increased demand we see further rises, the law of economics right ‘supply and demand.’
Could this spell trouble for the UK economy?
Even with the recent changes effecting landlords the rental market in the UK is continuing to grow, as investors realise there are simply not enough homes to go round. Wage inflation, average household income rising slower than the rate of inflation, all these things and UK house prices keep people in the rental trap.
Employment figures for the United Kingdom look pretty good at this moment in time, would a reduction in the ability of the UK workforce to be able to go where the jobs match their skills change this in the near future.
Companies have skills shortages in areas of the UK employment market to make it possible to attract more talent the increase in wages need to offset the cost of moving thereby making it economically viable. However, companies are struggling to increase profits, wage inflation is minimal and rental costs continue to rise
It is common knowledge that UK house prices and the cost of living is rising quicker than wages, the continued demand for rental properties keeps increasing rents, so soon something will have to give before it is too late, as one can not exsist without the other.
Employment mobility was a phrase invented by a previous Conservative government implying there would be copious amounts of employment opportunities around the country for those willing to move in the short term.
If UK companies are unable to attract the skill sets they require they will be at the mercy of their competitors both domestically and abroad, if something is not done to create more afforadable homes the UK could be in big trouble, the UK government has tightened restrictions on the employment of overseas workers in the UK leaving many businesses in a difficult situation.
UK house prices, higher cost of living and the ever increasing cost of renting a property all play a major role.
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