With over 40% of the UK's 2 million unemployed aged under 25 - typically a renting demographic - the private rented sector has been hit hard by the current economic downturn. By far the worst hit area is Northern Ireland, where unemployment among new private rented tenants is now nearly 17%.
Keshav Thukaram, managing director of Smartlandlord.co.uk, commented: ‘This proves there is rising demand from unemployed tenants as the national rate of joblessness continues to increase. With the social housing sector ill equipped to cope with extra demand, private landlords are increasingly being called upon to take in unemployed people on benefit. With oversupply in the rented sector due to reluctant landlords, taking in DSS tenants can be a good way to secure a regular income in the current environment. There is evidence that some landlords are suffering because benefits aren't being paid on time, so landlords taking this route must ensure they know their rights, and apply to have the rent paid directly by the council if they experience problems.'
With the regular employment market in turmoil, there has also been a rise in the number of self-employed tenants, up from 7.8% to 8.4% annually; and a slow but sustained growth in the number of retirees, from 7.8% to 8.1%.
The proportion of new tenants which are students is very seasonal, and usually peaks in July and August as landlords reference tenants before the start of the new university year. But with many of those who have lost their jobs going back into education, the proportion of new tenants which are students has risen from 0.2% last April, to 4.1% now.
Keshav Thukaram warned: ‘With the occupation of tenants diversifying from traditional employment, landlords need to make sure they reference tenants to ascertain they can afford the property, and ask for guarantors where necessary.
But tenant referencing is an indication of a tenant's past and current situation - it is no guarantee of the future. In the current economic environment, any tenant, whatever their employment may find themselves in financial difficulty due to some unexpected loss of income. This means landlords need to look at new ways to protect themselves, such as rent guarantee insurance and rent on time'