"Many key workers within the public sector typically have lower salaries but they also tend to hold more stable jobs which are less impacted by redundancies"
It’s sometimes hard to believe that the pandemic was ‘only’ just over four years ago, such is the volume and nature of events which followed one of the darkest periods in recent history.
For many, the term ‘key worker’ remains largely synonymous with this period and while this is an unfortunate relationship, what it did highlight was the importance of a number of occupations which may have been somewhat underappreciated in the past.
Time may have passed but our reliance on key workers has certainly not diminished. Although, we have to appreciate that the description of some key workers may have changed slightly from the early-Covid days. And when I say key workers in today’s context, I include those not only working in education or the health sector but roles within the army, navy or RAF, plus those in the UK fire service, the police and in the prison service, amongst others.
To underline the scale and size of the public sector, according to the latest ONS data, total public sector employment increased in March 2024 to hit its highest level since March 2012.
Within this, there were an estimated 5.95 million employees in the public sector in March 2024, which was 24,000 (0.4%) more than in December 2023 and 125,000 (2.1%) more than in March 2023. The figures also outlined that the NHS employed an estimated 2.02 million people in March 2024, an increase of 12,000 (0.6%) compared with December 2023 and an increase of 79,000 (4.1%) compared with March 2023.
Sadly, the fact remains that many key workers within the public sector typically have lower salaries but they also tend to hold more stable jobs which are less impacted by redundancies and other forms of disruptions to their employment type.
It’s this stability which makes them a unique and important group and, from a lending perspective, there’s an argument that key workers should be considered as a distinct borrower demographic who are deserving of access to solutions that address their unique circumstances.
Having said that, affordability constraints remain evident in a high interest rate environment where income-based borrowing can be challenging, especially if there are complexities which mean borrowers fall beyond tighter mainstream lending criteria.
A housing market where prices remain high across many regions of the UK also has to be taken into account. According to the latest Halifax’s House Price Index, despite June being the third successive month in which house prices have stayed relatively flat, it was suggested that “property prices are likely to rise modestly through the rest of this year and into 2025”.
This offers little let up for potential buyers with the Index reporting that the average house price was £288.455 in June, albeit slightly down from £288,931 in May.
How the housing and mortgage markets react to the new government and its ambitious pledge to build 1.5 million new homes within five years remains to be seen, but what we do know is that a huge number of potential and existing borrowers need more immediate support, especially key workers.
That's why, here at Foundation Home Loans, we introduced a specialist key worker offering back in August 2023 which includes enhanced loan-to-income (LTI) limits for borrowers in any of our eligible key worker professions across England, Wales and Scotland.
After all, key workers will always be the life blood of the UK labour force and it’s crucial that they have access to mortgages tailored to their needs which enable them to live near their workplaces, support their local communities, and continue delivering top-quality services to the public.
