“ WE ARE STILL SEEING RELOCATIONS AT THE TOP LEVEL OF BUSINESS. THEY ARE OFTEN BOARD LEVEL, SENIOR EXECUTIVES, OR STAFF WHO ARE CRITICAL TO BUSINESS FUNCTION.”
SIMON JOHNSTON, CEO, ICON RELOCATION
between 2022 and 2023 were seen in London (14%), Glasgow (14%) and Manchester (13%). “While a recovery in demand
for city-living and international relocations continues to exert upward pressures on rental costs in many locations around the world, new pressures have come into effect in 2023 and are accelerating price increases in multiple cities,” he says. Raised interest rates imposed
by central banks around the world have seen landlords increase rents to cover higher mortgage repayment costs, and many would-be-buyers have been forced to rent longer and delay purchasing properties until more favourable financial conditions return. Some of the highest rental
increases in Europe have been in Valencia (18%), Barcelona (17%) and Milan (8%). A growing technology sector and an influx of Ukrainian nationals have seen property availability in Berlin tighten and rental prices increase by 13% since 2022. Likewise, cities across Poland have experienced added demand for rented accommodation following Russia’s invasion of Ukraine and recorded double-digit percentage rent increases in a six-month period: Krakow (21%), Gdansk (18%) and Warsaw (14%), he says.
50
INTERNATIONAL ASSIGNEES STRUGGLE TO FIND SUITABLE ACCOMMODATION IN LONDON The
situation
in graduates to provide them with international experience. With this comes the challenge
is particularly
challenging in London. Katie Stedman, DSP manager at Santa Fe Relocation, says that companies were just not prepared for the average London rental increase last year of 17%. “It was a stark contrast to 2020
and 2021, where we were able to negotiate good offers for our clients,” she explains. “This year clients were not expecting the increases and their assignees were landing with a budget that was really set for 2022. Along with the increase in the cost of living, this has meant that we have had to manage client expectations and to explain that a lot of people can’t afford to be 15 minutes from the office anymore.” She says that prior to Covid, a
one-bedroom apartment in London might attract a rent of £1,500, but has now risen to £2,200 per month. The type of assignee has now changed, too, with companies looking to focus on moving more senior staff and spending budget on strategic moves, such as new project launches or setting up a head office. This is instead of bringing
of finding suitable accommodation for C-suite assignees. Many of these clients favour St John’s Wood and South Kensington in London, and want to house their families near prestigious international schools. However, family homes in these areas attract rents of £17,000 to £20,000 a month, which is now up to £5,000 a month more than pre- Covid levels. “Assignees are contributing
more to their rental allowance to get what they want,” she says. “On the other hand, companies are not considering buying residential property because although property prices are falling, mortgage rates have increased to 6 - 8 per cent. Some assignees are keen to buy privately, but UK red tape and a lack of a credit rating can work against them.” In general, there is a lower level
of turnover in rental properties, and companies are trying to negotiate a small rental increase rather than having to go out onto the open market and look for a new property for their staff, she says. Cities like Manchester and Bristol are also facing a rental shortage and strong rent rises. Simon Johnston, CEO of Icon
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