Rising property prices are not only proving problematic for first-time buyers, they can also cause a headache for employers struggling to attract and retain talent. As it gets harder for professionals to afford to get a foot on the property ladder, they are looking to maximise their earnings to make saving for a housing deposit a reality.
Rising costs of living are further intensifying the employee spotlight on salaries. It is becoming more and more difficult for people to save for a deposit by making cutbacks, so earning more money is the obvious answer. Moving jobs can prove an effective means of boosting salaries, which can be disruptive and expensive for businesses losing staff. However, this set of circumstances can also present employers with a new opportunity to retain the best talent and increase their appeal in a competitive job market.
Organisations can adapt benefits packages to support professionals in their efforts to buy their first homes. They may find this an advantageous way to stem the talent loss of The Great Resignation trend and an innovative method of engaging employees concerned and frustrated with out-of-reach home ownership. Better still, it is possible to achieve this without necessarily having to increase basic salaries.
To start with, employers can consider providing first-time buyers with bonus packages that are geared towards helping them save a deposit for a house. The payment can still be formally linked to employee performance and from an employment law perspective it would be very similar to a traditional type of financial bonus. Where it can differ is by structuring the amount of payment so it is more akin to the employee’s financial goals and more suited to the amount of house deposit they are trying to save for. Communication with employees is key to understanding their housing and financial goals and shaping bonuses accordingly.
It is also possible for employers to provide staff with low or no-interest loans, which can include deferred repayments, as well as low-value repayments for a certain period. This may provide an employee with more freedom to put a deposit down on a house and breathing space to cope with all the additional costs of setting up a new home.
Finally, forward-thinking employers may also want to draw on existing relationships with professional advisors to benefit first-time buyers. For example, it may be the case that a business’ preferred law firm also has a conveyancing specialism. This may present the opportunity to offer employees a negotiated rate for conveyancing to make the house buying process more affordable.
Undoubtedly, even if house prices do start to stabilise or fall in the near future, it will remain difficult for first-time buyers to save for house deposits. Employers should consider whether this is an opportunity to help staff and how this can positively impact their business.
Richard Kay is a senior associate at Forbes Solicitors.