The results of our recent survey continue to show what we are seeing on the ground: that the London pay premiums in the industry are closing.
Median salaries for the regions outside of the capital are now at £47,000 (16% difference), in comparison to 2019 where the average was £44,270 in 2019 (22% difference from London).
So why is this and will this trend continue?
Average (median) base salary change from 2019, by UK region.
Most areas in the UK have seen average salaries increase with the midlands leading by an average £3,300 rise. Sign up or log in to view this chart in full.
The Sectors Increasing Average Pay
There is no doubt the major regional hubs continue to ride the wave with the increased public and private sector investment. In recent years’ the regions have caught the eyes of domestic and foreign money with a desire to maximise their returns from the over-heated London market. This has been the most apparent in the Industrial & Logistics markets and Residential markets, (in its various forms).
Is the closure of London pay premiums likely to reverse? Well, not in the foreseeable future. We have a supply-and-demand issue in the number of specialised professionals, and there are still too many new projects being approved, new investors entering the market and public money flowing into the regions.- Nathan Wakelam, Director - Manchester
The Industrial & Logistics market seems to have obtained a seemingly insatiable appetite for stock, predominantly born out of our changes to on-line shopping. Similarly, there are few major regional city skylines that haven’t changed considerably over the last 5 years- the continued increase in apartment living, BTR and PBSA led schemes have seen to that.
The north is finally seeing public sector investment. The true impact of all things HS2 is still yet to be seen, although the expectation is already creating confidence that the north/south divide will be bridged further.
Otherwise, major regeneration projects in the Midlands, North West and North East are gathering pace and national interest for projects including Town Centre Regeneration, Housing Renewal and Science & Technology hubs to name but a few.
Salary Changes outside London
So what impact is all this interest having on salaries? Well, a positive one for employees, less so for employers.
It is becoming apparent the regional markets are having a real supply-and-demand talent issue, with the number of available professionals for practically all real estate disciplines being drastically lower compared to four/five years ago.
Add in the recent impact of Covid and the ‘last in, first out’ fear, and we are left with employers forced to add premiums onto regional salaries and a shift in ‘market rate’, with salaries creeping closer to those traditionally seen just in the South.
Is this closing of pay likely to reverse? Well, not in the foreseeable future. There are still too many new projects being approved, new investors entering the market, continued confidence and public money flowing into the regions.
We see the supply of professionals in these specialisms not being able to keep up with the demand, and save for a huge, unexpected occurrence, it's likely this trend will buckle. Roll in the real chance that true remote working will become the norm, and it's likely to remain a good time to be a regional real estate professional!
Get in touch to discuss salary bench-marking for 2021 and guidance on the best benefits package to attract the candidates you need.