What do letting agents check when referencing?

When you apply to rent a property in the UK, your prospective letting agent or landlord will conduct a series of checks. Often referred to as ‘tenant referencing’, this process is a crucial step for both parties involved. But what exactly do letting agents look for? This article looks into the typical checks undertaken by letting agents during the referencing process.

Identity Verification

Before any other checks are initiated, agents need to ascertain that you are who you say you are. This means verifying your identity.

• Proof of identity: A valid passport or driving licence is often required.
• Proof of address: This could include a recent utility bill or bank statement.

Employment and Income Check

It’s essential for agents and landlords to be confident that prospective tenants can afford the monthly rent.

• Employment reference: This will confirm your employment status, position, salary, and the length of your employment.
• Salary checks: Generally, your annual salary should be at least 30 times the monthly rent. If you’re renting a property for £800 a month, for instance, you’d typically need to earn at least £24,000 per annum.

Credit Checks

A good financial record is a key indicator of a tenant’s ability to keep up with rent payments.

• Credit score: A good credit score can be a positive sign, but agents also look for any adverse credit history such as CCJs (County Court Judgements) or bankruptcies.
• Debt and loan analysis: Having a high amount of debt might raise concerns.

Previous Landlord References

Gaining insight from a previous landlord can be invaluable when assessing a potential tenant’s suitability. After all, a tenant’s history with past landlords can provide a telling reflection of how they might behave in a future tenancy. Here’s an in-depth look at what letting agents typically seek to understand from references provided by previous landlords:

• Rent payment history: One of the primary concerns of any landlord is ensuring consistent and punctual rent payments. Therefore, a review of past rent payment habits becomes paramount. Were there any missed or consistently late payments? Even one or two late payments in the past could raise flags.
• Behaviour during tenancy: Landlords will want to know about any past issues, complaints, or disputes during the tenancy. This includes relationships with neighbours, adherence to property rules, or any other behaviour-related concerns. Were there instances of disturbances or breaches of tenancy agreements?
• Maintenance of the property: How a tenant treats a rental property can be a significant determinant of their desirability. Did the tenant maintain cleanliness and order? Were there any instances of damage beyond regular wear and tear? Did the tenant promptly report issues that needed fixing or neglect them?
• End of tenancy condition: Landlords also like to know the state of the property when the tenant moved out. Was it left in a clean and tidy state, ready for the next tenant? Or were there major repairs and deep cleaning required?
• Notice period adherence: When ending a tenancy, tenants typically have to give a specified notice. Did the tenant adhere to this notice period in the past? Abrupt departures can result in unexpected costs and vacancy periods for landlords.
• Willingness to re-let: One telling question many letting agents or new potential landlords might ask the previous landlord is whether they would rent to the tenant again. A positive response can be a strong endorsement, while hesitation or a negative reply might be a cause for concern.

By examining a prospective tenant’s past rental history, letting agents and landlords can get a comprehensive understanding of their suitability for a new rental agreement. A good track record with previous landlords can significantly enhance a tenant’s chances of securing a new rental, making it essential for tenants to cultivate good habits and relationships in every tenancy.

Right to Rent Checks

The ‘Right to Rent’ is a legal requirement in England that mandates landlords to check the immigration status of all prospective tenants, ensuring they have the legal right to rent a property in the UK. Introduced in 2016 as part of the Immigration Act 2014, this check aims to discourage illegal residency in the UK.

• Purpose of the Check: The government introduced the ‘Right to Rent’ checks to ensure that those with no legal right to live in the UK cannot establish a settled life here through accessing the private rental sector.
• Valid Documentation: Tenants must provide documents that prove they can live in the UK. These can be:
  • A UK/EU/EEA passport
  • Biometric Residence Permit (BRP) or card
  • A current Immigration Status Document, accompanied by an official document that displays the tenant’s permanent National Insurance number and name
  • Birth or adoption certificate for those born in the UK.
• Variety of Statuses: Different immigration statuses come with varying rights. Some people may have an unlimited right to rent (e.g., those with British citizenship or EU/EEA nationals with settled status). In contrast, others might have a time-limited right based on visas or other temporary permissions.
• Follow-Up Checks: For tenants with a time-limited right to rent, landlords or letting agents will need to conduct follow-up checks. This is to ensure that the tenant’s right to rent hasn’t expired. If a tenant’s right to rent has ended, landlords are obliged to make a report to the Home Office.
• Penalties for Non-compliance: Failing to conduct the ‘Right to Rent’ check can lead to hefty fines for landlords. If a landlord or letting agent knowingly rents a property to someone who does not have the right to rent in the UK, they can face unlimited fines or even prison.
• Additional Checks Post-Brexit: After the UK’s exit from the EU, the guidelines around right to rent checks for EU, EEA, and Swiss citizens have undergone some changes. While there was a grace period, it’s crucial for landlords and letting agents to stay updated on the latest requirements.

The ‘Right to Rent’ checks, though seemingly bureaucratic, play a critical role in the UK’s immigration framework. It ensures that the private rental sector doesn’t inadvertently facilitate illegal residence. For tenants, it’s crucial to understand these checks and ensure they have the necessary documentation ready. For landlords and letting agents, staying informed and diligent about these checks is essential not only for legal compliance but also for upholding the integrity of the letting process.

Personal References

Some agents may also request a character reference. This is typically a written statement from someone who knows you personally but isn’t a relative.

• Character assessment: The referee will provide insights into your reliability, honesty, and general behaviour.

Guarantor Checks

If there are concerns about your financial stability, or if you’re a student without a steady income, you may be asked to provide a guarantor. Guarantors commit to covering your rent if you’re unable to.

• Guarantor’s financial checks: Just like tenants, guarantors will undergo credit and employment checks to ensure they can cover the rent if needed.

Tenant referencing is a comprehensive process designed to give landlords and letting agents a clear picture of a potential tenant’s reliability. While it might seem daunting, it’s essential to ensure a smooth tenancy for both parties. By understanding what checks will be undertaken, potential tenants can be better prepared and improve their chances of securing their ideal rental property.

Are you on the hunt for your next rental property? Make sure you’re prepared for the referencing process by gathering all necessary documentation in advance.