Job losses in the retail sector could lead to in a spike in mortgage arrears as people struggle for employment, Spicerhaart Corporate Sales account manager Dave Miller has predicted.
Department store House of Fraser will close 31 of its 59 shops by 2019, affecting 6,000 jobs, while Poundworld is on the brink of administration, putting 5,300 jobs at risk. These are just the latest retail brands in crisis after Toys R Us and Maplin closed down this year.
Miller said: “While it is sad to see these established names starting to disappear from our high streets, the wider knock on effect is more worrying.
“Ongoing job cuts in the retail sector is putting pressure on the jobs market, as so many low skilled workers are finding themselves unemployed at the same time, competing for a hugely reduced number of jobs.
“Some may quickly find employment again, but for many, unemployment will be prolonged, putting their lives and homes at risk. As a result we could see a spike in mortgage and rent defaults which will almost certainly contribute to a rise in arrears and repossessions.
“Lenders need to be keeping a close eye on their clients’ ability to keep up their repayments and engage with third parties to look after every borrower’s best interests.”