Landlords must prepare for tenant job losses
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Landlord Assist, the nationwide tenant eviction and rent collection firm, is advising landlords to consider the impact of tenants who could lose their jobs due to the government cutbacks and to take preventative measures.
It says that the 490,000 public sector job losses revealed in the Comprehensive Spending Review mean many tenants could come under increasing financial pressure over the coming months.
It adds that rising unemployment levels could lead to an increase in arrears and void payments as tenants are unable to afford the rent.
This puts increasing pressure on landlords to sustain their own mortgage commitments.
But Graham Kinnear, director at Landlord Assist, says that by taking precautionary measures landlords can minimise the risk of a tenant defaulting.
He says: “Landlords need to make sure they reference tenants at the start of the tenancy agreement to establish whether the prospective tenant can afford the rental payments. They should also ask for guarantors, namely family and friends, to cover the cost of missed rent should the tenant default on payment.
He says landlords should obtain employment references over the type of work they do.
But a landlord can never be certain a tenant will keep their job so Kinnear suggests renewing interest in rent guarantee and legal expense insurance.
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