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Total Talent Update May 2024: What's the outlook for the UK's Real Estate Market?

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The property industry has been navigating an evolving hiring market since it entered 2024. The market has seen a steady period of growth over the last 12 months, and the real estate sector has demonstrated resilience and adaptability.

As businesses navigate the current landscape, I wanted to highlight key trends I’ve been seeing regarding job vacancies, wage inflation and talent movement with the aim of equipping property industry leaders with the knowledge to capitalise on emerging opportunities.

I hope you find the below useful.

The UK Economy

2023 was still a challenging year for the UK economy, entering a shallow recession in Q3 and Q4. According to CBRE’s latest UK Real Estate Market Outlook 2024 Report, they anticipate modest growth for the UK economy with a rebound expected in 2025. Inflation should move towards the target, allowing interest rate cuts that will support real income growth.

According to CBRE, there was an 8% rise in new home construction for housebuilders in H1 2023, up from the previous year. While this signals a short-term improvement in the supply forecast for new home completions in 2024, it remains far below the industry’s usual target.

In periods of slow growth, talented people often become frustrated. If they aren't receiving the growth opportunities where they are currently, they often start to look for it somewhere else. My advice to businesses would be to get ahead of the curve and tap into this top talent that is under the surface and ready to make the move for businesses that can offer them the growth prospects they are looking for.

Markets are recovering and stabilising, and the market is looking on track for 1.1 million sales in 2024, up from 10% last year according to Zoopla. We should see a steady and more controlled market for all stakeholders within the industry, compared to where we were 2 years ago.

Job vacancies, applications, and unemployment rates

According to the Office of National Statistics, the Real Estate industry has seen a 28% increase in the number of job vacancies within the sector throughout the October to December 2023 period.

UK Job Vacancy Growth 2023-2024

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(Source: Office for National Statistics, 2024)

This is an encouraging statistic for businesses operating within the industry and is reflective of a steady growth period and increased activity in real estate transactions as mentioned above. We are seeing more opportunities for hiring talent than there were 3 months ago, which has in turn brought new entrants into the market.

deverellsmith saw the impact of this growth continue into the new year as our business registered an increase of 88% in job vacancies in Q1 2024 compared to Q4 2023.

deverellsmith job vacancies added comparison (Q4 2023 – Q1 2024)

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(Source: deverellsmith, 2024)

Although this highlights an active market, it doesn’t necessarily provide a holistic overview of the entire employment landscape as redundancies and layoffs are still being seen within the sector, particularly in larger businesses. I’ve also noted a rise in senior redundancies through the past 12 months. Concurrently, there has been consistent activity across C-suite levels, driven by shareholders seeking fresh leadership and C-suite executives deciding now is the time for change.

In today’s market, recently laid-off talent will be likely to encounter more job openings than at any time over the past 12 months. This allows them to be discerning in selecting the businesses they join. I’ve found professionals are now moving for nothing less than the right opportunity and companies that can provide them with career growth. Businesses should listen to the candidate market and consider ways they can attract the top talent and stand out in the competitive market.

Wage inflation and bonuses

Across all industries, The Office of National Statistics reported a 6.0% annual growth in regular earnings (excluding bonuses) and an annual growth in employees' average total earnings (including bonuses) of 5.6%.

In May 2024, I shared a poll to my network asking: “How was your bonus impacted this year?” with just under half (49%) saying it decreased, 32% saying it increased and 19% saying it stayed the same.

Poll Results ‘How was your bonus impacted this year?

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(Source: Andrew Deverell-Smith LinkedIn poll, 2024)

These numbers highlight that employees have received lower bonuses this year, although wages have been increasing (by 6% in March 2024). It is probable that this wage growth will continue for employees to catch up to where wages were before the cost-of-living crisis.

Broadly I believe the majority of people in UK real estate have made less money in the past 12-18 months and bonuses are looking much lower across the board. I have seen businesses in the UAE and Saudi taking measures to manage their cost of people by offering smaller packages to align with the economy and the rest of the world.

Over the last 7 months, Hintel has worked with many leading businesses on salary and benchmarking projects to help them make more informed decisions.

Global talent movement

The UAE has seen huge growth in both its real estate market and talent pool.

According to LinkedIn Talent Insights 2024, the number of property professionals has increased by 42% in Q1 2024 compared to Q4 2023, and the number of jobs posted in the same period has increased by 94%.

UAE Talent Overview

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(Source: LinkedIn Talent Insights, 2024)

The driving force behind the growth of UAE’s real estate industry has been the population rise in recent years. The UAE has witnessed a faster growth in January - March 2024 compared with 2023, growing by a massive 25,776. With zero taxes on income and property compared to other countries, combined with an active and ambitious market it makes it an attractive place for property professionals to further their careers.

The rise in population has also resulted in an increase in the demand for residential and commercial properties, as well as increased property values we see this region as currently being the most exciting of all.

Consistent growth in both the population and investment has subsequently created more employment opportunities, which is why we have seen global talent flock to the region. Beyond its infrastructure, the UAE now offers a diverse range of opportunities for professional growth. A considerable amount of talent is flowing into fields such as construction and marketing to support the rise in demand according to LinkedIn.

To summarise

The UK market is stabilising with modest economic growth expected in the coming years. The rise in job vacancies and market stabilisation provides an active market for recruitment, but also demands strategic actions to address redundancies and shifting professional expectations.

The GCC’s booming real estate market demonstrates how population growth and favourable economic conditions can drive talent influx and industry expansion. By leveraging these insights, I hope that property industry leaders can better navigate the competitive landscape, ensuring their businesses are well-positioned to thrive in 2024 and beyond.