UK Government needs to take care not to replicate the Irish housing crisis

Businesses in London may have to buy or rent homes for their employees if the UK Government doesn’t take care to avoid replicating the Irish housing crisis.

Heather Powell, Head of Property, said:

Recruitment teams at major employers in London, especially in the South East, are reporting that graduates who had accepted places on training contracts with a September 24th start are deciding instead to accept jobs in other cities, citing the cost of renting a home as a major factor. Even higher earners are deciding to move out of the region because the size, and quality of the home they can afford is significantly greater away from London.

This could lead to London experiencing the same housing crisis as Ireland. Housing costs in Dublin are among the highest in the EU, and major employers are having to rent or buy homes for their employees. Ryanair Holdings, the food retailer Musgrove and Windmill Healthcare group have brought or rent a combined 103 properties in Dublin for their staff.

Unless the UK Government directs further funding to the provision of affordable housing, we could see London businesses faced with no choice but to buy or rent homes to keep their staff in the region, increasing significantly the capital investment and annual operating cost of running a business in London.

Affordable housing, especially in London, is required to facilitate the economic expansion of the UK economy, on which all the UK Government’s plans are predicated to be delivered. Great care must be taken or we will see a replication of the Dublin housing crisis and all the difficulty that it can create for businesses.

The UK Government has announced that it will ensure 1.5m new homes are built over the term of the next parliament through planning reforms, but those homes need 1.5m buyers. Individuals and Social Housing Providers do not have the funding, or ability to raise the necessary funds to buy.

Would you like to know more?

If you would like to discuss any of the above, please speak to your usual Blick Rothenberg contact or Heather Powell using the form below.