Sunday, 04 October 2015 News
How will the living wage affect NI Commercial Property
Chancellor George Osborne’s Budget saw changes announced which will see workers over 25 earn no less than £7.20 next year, before rising to £9 in 2020.
Business leaders have criticised the sharp increase in the level from the current minimum wage, which is £6.50 for adults, and the impact that could have on firms here.
Economic commentators suggest the introduction of a national living wage next April, some 7% higher than the national minimum wage, will be a concern to many businesses.
At Murphy we are already seeing the impact, with some of our retail client’s making provisions to ask for lower rents on new stores they plan to open in 2016 and also advising us they need certain levels of rent reductions in existing stores in the coming years, to allow for the wage increases that are coming down the road.
While this maybe not what Landlords want to hear, as people and property are two major costs to any business, something will have to give and I suspect in many cases landlords, will have to work with occupiers to keep their tenants, in sustainable business going forward.
We watch with interest to see how the market changes in the coming years to this new cost and the impact on commercial property.