Unemployment rise could pose challenge for landlords

by Gary Whittaker

Landlords and agents could find they face an increasing number of cases of tenants finding difficulty in paying the rent after losing a job, following the first quarterly rise in unemployment in the UK for two years. 

In the three months to December, the seasonally-adjusted figure for the number of unemployed rose by 46,000 from the previous quarter (July to September 2017).  

This figure must be contextualised with some caveats, of course. The total number of people out of work is now 1.47 million, still 123,000 fewer than at the end of 2016. In addition, the joblessness figure was still falling in the three months to January, so the latest figures are down to a sudden drop in December, which may suggest an unusual month rather than the start of a trend. 

Moreover, 88,000 more people were in work at the end of the quarter compared to when it started, so there are evidently still lots of jobs around. 

Nonetheless, with economic growth tipped to be slower amid the uncertainty about what Brexit will bring, it is quite possible that joblessness will rise, and that may mean more instances of tenants suddenly finding their income plunging. 

If so, landlords and agents do need to be aware of how they can best respond. In the worst case, a tenant might bury their head in the sand, not pay and stay silent, leading to a conflict that could end in eviction.

This shouldn't happen, of course, and landlords and agents can help by making clear to tenants that if they get in any trouble they should let them know. Among the help that can be provided is pointing tenants towards information and help they can get in making benefit claims. Moreover, landlords and agents will help themselves by understanding the universal credit system.

However, the latest employment data is not all bad news. This curate's egg of a statistical release also showed earnings are edging up again. That could mean any squeeze on rental prices will not last. 

With another upbeat element of the latest data showing productivity growth at a post-recession peak, the upward wage trend may have real traction. If the unemployment rise turns out to be a mere blip, the year ahead may actually be very positive.

Find out more about letting agency softwareADNFCR-1064-ID-801844915-ADNFCR

22-February-18General Lettings News