Jobseekers around the world are setting their sights on roles overseas, once again.

 

With international business travel now back on its feet and all country borders now reopened, the joyous ‘pre-pandemic’ assignee lifestyle is slowly, but surely, returning to normal.

However, for employees looking to embark on a new assignment overseas, the mobility landscape has shifted quite considerably – particularly the assignee housing market.

In our latest blog series, we gathered insights from global mobility and housing experts around the world to explore the state of assignee housing in 2023 – and the key trends causing difficulties in this space.

In this blog, we explore the vast number of challenges for new assignees relocating to the UK, and how a progressively worsening market is striking an imbalance between supply and demand.

Countrywide supply issues

The number of tenants compared to rental properties available in the UK is at an all-time-high.

In fact, the ratio is almost quadruple the number of tenants to rental properties, meaning that for assignees in search of housing in the UK, the hunt often results in a cycle of disappointment.

This should come as no surprise when it comes to the country’s capital, London, where a vast majority of assignees will be looking to relocate, and properties have long been hard to come by and leased at astronomical rates. But it is also something we are seeing across the entire country, in other cities, such as Manchester, Leads and Glasgow. According to property website Zoopla, the number of houses available on the UK rental market have dropped by a third in the period between September 2021 and March 2023.

Recent events impacting the construction sector in the UK, such as lockdown measures stalling the completion of new builds, paired with other factors such as economic instability and shifts towards short-term rental agreements, have contributed to the shortage.

With demand continuing to dominate supply, the shortage in availability is impacting low, medium, and higher-value rental properties, with scarce options remaining for assignees.

Properties are entering and leaving the market at lightning speed, so those wanting to secure housing must act fast – leaving little room for assignees to be picky.

The market has got progressively worse in terms of supply vs demand, so people who are moving to the UK with their job must prepare for disappointment.

– Vicky Woods, Client Services Director for Europe at Crown World Mobility.

House-hunting process in the UK

The lack of housing supply, of course, creates a stressful house-hunting process for mobility managers and assignees.

Gone are the days when letting agencies would fill a two-day itinerary with property viewings. Nowadays, the house hunting process is strongly led by availability, and it’s difficult to confirm in advance the number of properties that an assignee will be able to view in a day. For example, in the past, if there were ten properties in Manchester, viewings for all of these could potentially be arranged, but that’s highly unlikely in the current market as these properties have often already been taken and therefore are not available on the day of viewing.

To alleviate stress and disappointment, what’s needed instead is to manage the house-hunting employees’ expectations around housing availability, whilst still remaining proactive and flexible by showing as many houses as possible that meet their needs. It’s also important for mobility and HR managers to check in with their letting agents regularly to ensure they are up to date with new market pressures.

We will always show as many properties as possible, but we don’t want to show properties that don’t meet the family/individual requirements, to avoid wasting their time.”

– Vicky Woods, Client Services Director for Europe at Crown World Mobility

When assignees are indeed able to view a property, they will receive it in the same condition they viewed it in, following a full clean prior to the tenancy commencement. And in the UK, when it comes to securing the property, verbal commitment doesn’t quite cut it. If any special conditions are discussed at the viewing or after, this must be documented in the tenancy agreement, unlike other European countries where spoken word can be binding.

Landlord and contract issues

For assignees who do seal the deal and secure accommodation in the UK, it quickly becomes apparent that for the most part, it is a landlord’s market, with rents skyrocketing and continuing to do so across the country. While the RPI (Retail Price index) was on average around 2% in 2018, this has shot up to 11.3% in 2023, with landlords looking for an increase of rent in line with this figure.

Once tenants have secured a property, it’s also difficult for them to request any special conditions, such as walls to be repainted or furniture to be added, as these are all direct costs to the landlord. Instead, they are likely to go with alternative tenants who are willing to take the property without the ‘added hassle’ – an easier (and cheaper) way to bypass additional costs.

In terms of deposits, the situation can be complicated for assignees relocating here. Personal tenancies require the deposit to be registered with a protected deposit scheme, however, for any disagreements between tenants and landlords, the process is quite formal and complex.

If the landlord and tenant cannot come to an agreement regarding rental deposits, evidence must then be gathered and submitted – typically through an online portal – by both parties, before an adjudicator reviews it in order to come to a decision.

– Vicky Woods, Client Services Director for Europe at Crown World Mobility

All in all, it’s often a complicated process for tenants across the UK.

Parting words

With quadruple the number of prospective tenants compared to available housing, demand continuing to dominate supply, soaring rent rates and often complicated issues with house hunting and deposits, there are a whole host of hurdles for assignees relocating to the UK to consider before they embark on their house hunt.

To learn more about expat housing and relocating employees overseas, contact us here.

Keen to learn more about the trends that have emerged as we continue to adapt to a hybrid working policy?

If you want to learn more about how leaders in the employee mobility sector are developing flexible working strategies for employees on assignment, make sure to download your copy of the Mobility Trends 2023 report here.

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