Previous Article Next Article Research has found that many staff are struggling to takethe first step on to the housing ladder. Employers are warned if they do notact now, the economy will suffer. By Karen HigginbottomSpiralling house prices are causing severe skills shortages in the SouthEast. A report by think-tank the Institute for Public Policy Research shows thatemployees on salaries of up to £25,000 per year are struggling to buy homes(News, 31 July). They are not eligible to apply for social housing and arefaced with either renting accommodation or moving away from the area – and manyare leaving. The IPPR report, Squeezed Out, warns that if employers continue to ignorethe problem then skills shortages will intensify and economic growth willsuffer. It is calling for employers to help their staff with the additional propertycosts through wage additions, imaginative work-based saving schemes andinterest-free loans for a home deposit. But some public and private-sector employers are already starting to tacklethe problem. One of the few private-sector employers that already runs an initiative tohelp its employees make their first step on the housing ladder is IT firmLogica. It contributes to a staff saving scheme to help employees build up adeposit to buy a house, or provide a six-year mortgage subsidy. Logica matchesstaff contributions over a two-year period. Glenn Connell, director of compensation and benefits at Logica, explainsthat 15 per cent of the firm’s 5,000 full-time staff have opted to participatein the scheme, which is offered as an alternative to the company pension. “We believe we are benefiting as it helps us attract and retain thebest people,” he said. “The scheme is mainly aimed at our younger members of staff to givethem more choice in terms of their lifestyle. It will help them get on theproperty ladder. I haven’t come across anything like our schemeelsewhere.” Public-sector employers are suffering the most severe skills shortages,however. The Government has recognised the problem and is launching a £250mscheme in September to boost public sector recruitment. It hopes to help 10,000 nurses, teachers and police to buy their own homes.Staff in areas experiencing the worst recruitment problems will be able toapply for subsidies of up to £25,000 to get on to the property ladder. The scheme will include grants that can be used as deposits, interest-freeloans and shared ownership deals, under which an employee might own half theproperty and pay rent to a local authority or housing association. It is not just a London problem, either. Skills shortages due to increasinghouse prices are hitting many towns in the South East. Another report, Counting the Cost of Housing, shows that house prices were30 per cent higher in the South East than the UK average last year. Author AlanHolmans, who was commissioned by the Chartered Institute of Housing and theNational Housing Federation, claims that earnings have only increased by 4 percent above the UK average. Surrey Police Force has already introduced a housing assistance scheme forits 2,000 police officers and 1,000 civilian staff. Initiated last year, the scheme lets staff participate in shared propertyownership, explained Martin West, head of training and development at SurreyPolice. West said, “The shared ownership scheme means that staff can identify ahouse on the open market and enter into the scheme with a housing association.They can get a larger mortgage from the mortgage provider which we haveidentified to assist us.” He admits that the force is limited in the amount of financial assistance itcan offer. “We are hidebound by statutory police regulations such asnational pay scales, which means that we can’t offer staff additionalwages.” He believes spiralling house prices affect retention rather thanrecruitment. “So far, we have not had huge difficulties in recruits comingforward,” said West. “The bigger problem is with staff joining us after two years’ probationwho want to start a family and get on to the property ladder. We then find theywant to transfer to other forces in the UK where property prices arelower.” Escalating property prices in the Thames Valley has prompted MPs to lobbythe Government over introducing a wage supplement similar to London weightingfor public-sector workers. Martin Salter, MP for Reading West, said, “It’s ridiculous thatpublic-sector workers can get London weighting in Walthamstow, but you can’tget wage supplements in Reading, which is just as expensive. “You get a qualified teacher on £22,000 a year who can’t afford to buya £70,000 property. These kind of workers need the ability to bridge the gapand access the housing market.” Salter suggests that employers should offer interest-free loans to employeesas a possible solution. He has been meeting with local private-sector employersto encourage them to act. “I advised them to buy up existing housing stocknow so that they can house key workers,” he said. The health sector is a particular area of concern. The Department of Healththis month set aside funds to set up three staff hotels in London, which willprovide cheap accommodation overnight or between shifts. The first one has beenestablished near Moorfields Eye Hospital. John Adsett, secretary of the Association of Healthcare Human Resource Management,believes that this scheme needs to be extended. He said, “The only problemso far is that it has been concentrated in London. It needs to be cascaded outto the South East and other cities in the UK experiencing staffshortages.” The IPPR is calling for employers to embrace the problem. Back-officefunctions should be located away from high housing demand areas, andhot-desking outposts could be created nearer to employees’ existing homes toavoid long-distance travel. It believes only a broad approach such as this willeffectively combat rising skills shortages. www.ippr.org.uk Skilled staff squeezed out of the South East by house pricesOn 21 Aug 2001 in Personnel Today Comments are closed. 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