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By Mark Wadsworth blog
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If this is a good idea, then employers will do it anyway.

Friday, January 13, 2017 10:34
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From a recent Evening Standard:

Employers were today urged to offer loans to staff to cover their rental deposit as part of a campaign to help workers with soaring housing costs.

Mayor Sadiq Khan announced that all parts of the City Hall group would offer employees help with renting a flat and urged businesses across the capital to follow suit.

Many firms have reported that they are struggling to retain and attract the best talent as workers are increasingly priced out of the capital.

The campaign, Fifty Thousand Homes, calls on employers to pay all staff the London Living Wage and to offer housing advice and flexible working within six months of signing up.

They are also encouraged to offer help to buy through mortgage guarantees or loans, preferential lending terms for mortgages and to consider providing quality rental accommodation.

For an individual employer, it might be a good idea to thus steal a march on other employers and/or get away with paying lower wages in exchange for a larger bung up-front. i.e. if you don’t have enough cash to move to London and are offered a £40,000 job in London, you can’t accept it. If another employer offers you £5,000 signing on fee to pay your rental deposit etc and a £35,000 salary, you might take it, but are then stuck with the £30,000 salary until you repay the £5,000 up front payment (which will take you years).

If all employers do it, then it will merely push up rents and house prices (and suck money out of the rest of the economy). Khan is firmly in the pocket of the developers and is as Home-Owner-Ist as they come, of course.

The added downside is that if employees owe their employers money, they are one step closer to being bonded slaves. I’m always very wary of employment-related accommodation, it’s a bit of a trap.


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