The Tenant Referencing Process Post-Furlough

20.07.21 11:10 AM Comment(s)

Guest Blog: RentProfile 

GOV.UK found that 2.4 million people moved off the furlough scheme between February and May at the time when businesses slowly started reopening. 

Although this is great news for businesses, there are still 2.4 million people who remain furloughed or flexi-furloughed, and jobs are still at risk.

Tenant referencing after furlough

Not only that, but with over 840,000 tenants in arrears, it’s important that agents and landlords have a robust system in place for referencing tenants. RentProfile offers a referencing service that is fully responsive to changes in furlough, which you can access directly from Rezi estate agency software.

How has referencing already had to adapt during COVID-19?

Letting agents have faced the full brunt of the legislative changes when it comes to referencing their tenants. Affordability had to factor in the furlough scheme, as well as verifying whether their employer tops up their pay to 100%. Assessing furlough for self-employed tenants was also important (the dates they could qualify for a furlough payment etc), and Universal Credit saw an uplift which agents had to be aware of during referencing.

Amidst all this was an Eviction Ban and 6 months’ required notice, which meant properly referencing tenants was absolutely vital. Otherwise, landlords would have to be locked into tenancies for longer than expected.

But we’re not out of the woods just yet. Another big change is coming which is sure to affect your tenants’ circumstances.

What will happen to tenants’ circumstances when furlough ends?

The furlough scheme changed from 1 July 2021 - the level of government grant was reduced from 80% to 70%, and employers were asked to contribute at least 10% towards the cost of their furloughed employees’ wages. In August and September, the government will pay 60% and employers will have to pay at least 20%. After 30 September, the furlough scheme will be entirely phased out. And what’s more, the £20/week uplift to Universal Credit will also end after 30 September.

This financial plan was made in the Chancellor Rishi Sunak’s Budget 2021, back in March 2021. This was before the Delta Variant was first noticed in the UK, and only a couple weeks after the roadmap out of lockdown was first announced - clearly, no-one expected the final stage to have been delayed. But despite the fact that the original 21 June end-date has been delayed until 19 July, the furlough dates remain the same. 

This could be an incredibly risky move from the Chancellor. Will workplaces be able to contribute to their employees' salaries if the UK isn’t fully opened up yet, or if workplaces have only just been able to open up? This will put a test on the stability of the job market, especially for the industries that have relied so heavily on furloughing their staff such as retail, service and hospitality. 

Also, as the government backtracks on face-coverings being needed post-freedom day (England), what other unexpected changes may we face that could potentially affect your tenants’ income? All of this uncertainty could severely jeopardise job market recovery, and tenants’ circumstances could yet again be put in a state of disarray.

Face masks in real estate business

RentProfile offers a tenant referencing product that adapts to tenants' circumstances

The months leading up to September and beyond will be crucial for letting agents, in terms of how they are referencing their tenants. We at RentProfile make sure to take into account the risks of the furlough scheme ending, and we will continue to adapt our Referencing in line with changing factors, for our agents and landlords. 

RentProfile has partnered with Dezrez to provide a referencing integration to Rezi users. You can now easily request a RentProfile reference check from within Rezi - click below to find out more. 
RentProfile & Dezrez Partnership