Moore and Blatch, the lender debt recovery specialist, has warned that lenders need to keep a watchful eye on arrears as the unemployed find it harder to regain work.
Recently published statistics from the Office for National Statistics show that the claimant count for the unemployed has risen 11.3% in the 12 months to May 2006.
Alarmingly, job vacancies fell by 8.5% across the same period.
Paul Walshe, head of lender services at Moore and Blatch, says: Until the middle of 2005, Lenders benefited from a falling unemployment rate and rising job vacancies.
This meant that those who were unfortunate enough to lose their jobs were able to find alternative work.
But, since the middle of 2005, there has been a sharp reversal of fortunes. If people find it harder to find work they will be more likely to fall into arrears.
“Now is certainly the time to ensure lenders are aware of potential bad debts.