Worries that rent arrears will increase with job losses

It has been predicted that more and more tenants will now default on their rent following the news that unemployment has reached a 12-year high as 2.26 million are now unemployed.

The Office for National Statistics released these figures on Monday, showing that the number unemployed has grown by over 200,000 in just three months. The Managing Director or HomeLet responded by stating that we should expect a proportional rise of the number of landlords not seeing rent for their tenants.

The figures from the Office for National Statistics also showed that the number of people currently in work has seen its biggest slump in one quarter since records began in 1971.

One of the worst areas to be hit is youth unemployment for those aged 18-24. This has increased by 74,000 to those out of work now at 695,000.

HomeLet provides tenant referencing services in the UK, and the majority of its 30,000 applicants each month are aged in this 18-24 bracket.

The figures for youth unemployment are at the worst they’ve been for 15 years, and this is expected to get worse over the next few month as a whole new batch of school leavers will be attempting to find work.

It is expected that this figure could impact the private rented sector in areas that rely heavily on young people finding jobs and taking rented accommodation as opposed to staying in their family home.

This rising unemployment in young people could delay the recovery. Even those who manage to find jobs are facing an uncertain time ahead.

In the case of landlords, many rely on monthly rent to pay the mortgage – so missed payments could be a huge problem. HomeLet director urges landlords to take out landlord insurance to protect themselves in these circumstances.