Landlords need to consider the impact of tenants who could lose their jobs due to the Government cutbacks, says Landlord Assist.

The company says that over 800,000 jobs were lost during the recent recession. And with another 490,000 public sector job losses announced as part of the Government Spending Review many tenants could come under increasing financial pressure over the coming months.

For landlords the ramifications are potentially serious should a tenant lose their job. 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.

Graham Kinnear, Director at Landlord Assist, says that by taking precautionary measures landlords can minimise the risk of a tenant defaulting.

"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 said.

"Nearly all references include an employment reference nowadays, providing landlords with a good indication of a tenants employment history and current situation. However, when gaining a reference check landlords need to pay particular attention to the type of work. Only a few years ago the ideal tenant would be one working in the financial industry, but that is not the case anymore."

But even the most in-depth reference checks cannot stop a tenant becoming unemployed.

Kinnear adds: "With many more cuts expected in both the public and private sectors, many tenants may find themselves in financial difficulty over the coming months. This level of uncertainty is worrying for landlords and it may well encourage more of them to renew their interest in rent guarantee and legal expense insurance."