Recent research indicates that a third of 18 to 24-year-olds are earning less today than they were before the Covid-19 crisis. Additional research with deposit insurers shows that across the UK half of tenants are aged 16 to 34 and young workers are expected to be disproportionately impacted by rising unemployment as government support is wound down.
Close to half of the 2.8m retail workers are aged 16 to 34 and six in 10 working in food and beverage outlets are potentially going to lose income due to a reduction of working hour or loss of their employment all together.
As the job retention scheme changes, employers have to contribute to employees wage cost. Many commentators are predicting a return to 10% unemployment - a level not seen since the 1970's. Whilst we all hope that the worst predictions are not realised, it seems certain that many current tenants will suffer financially due to reduced working hours or because of unemployment.
It now seems certain that Section 21 legislation is changing, making it more difficult to evict tenants, for rent arrears. This will force landlords to rely on the Section 8 notice for re-possession which is both slower and more bureaucratic during normal times and is expected to take several months once Housing Courts re-open and work through the current backlog of cases. Should unemployment spike as predicted, there will be growing pressure on government to protect tenants from eviction for longer, which seems certain to force landlords to cope with prolonged periods of reduced or zero rental income.
It has become a cross-party political norm to disregard the interests of landlords, and instead favour tenant protections. There are after all far more votes cast by tenants than there are by landlords! This means that landlords should act now to protect their financial interests by committing to rent protection or rent guarantee insurance for each of their tenancies. The income protection that they offer and the legal and eviction support that will prove to be invaluable over the coming months and years for those landlords whose tenants fail to pay their rent.
Landlords need to keep their property assets in a stable and secure safe-haven during the economic uncertainty to come. Rent protection insurance will help mitigate the risk of loosing rent.