Published: 19/09/2021The definition of Tenant Referencing is when new landlord or letting agent finds out more about you.
Tenant referencing is an essential step in the rental process as you have to prove to the landlord, or their agent, how reliable you are as a tenant before signing the legally binding contract.
With the rise of renters, landlords can be extra fussy as to who they chose, so it's essential to get your ducks in a row before you start your search. It is the final hurdle that stands in between you and your dream home and therefore it is necessary to pass the process quickly.
In this simple guide, we look at some of the things you'll need to do:
ELEMENTS OF THE TENANT REFERENCING PROCESS
Most importantly, landlords need to know that you will be able to pay the rent, that you will look after the property, and that you aren't attempting to defraud them in any way.
This is achieved through
- Credit checks
- Investigating address history
- Investigating the authenticity of bank details
- References from previous landlords
NO SKELETONS IN THE CUPBOARD
Although intimidating, each application is unique and utterly dependent on circumstances. We advise that you don't try to pull the wool over the new landlord's eye, as the quicker the process is completed, the sooner you can move in. For example, be upfront about any past bad experiences with landlords or credit rating issues you may have had, as this will stand you in good stead. When conducting a tenant reference check, landlords, and letting agents will always look favourably upon someone who has been honest.
THE FASTER, THE BETTER
The referencing process is a crucial box that your landlord needs to tick before handing over the keys to their property. It's worth remembering that while there is a void period, your landlord is losing revenue, so they’ll want it occupied quickly. Landlords and agents generally use an independent company to complete these checks. They may follow up your application with requests for further evidence i.e. references for renting from both employer and previous/current landlords, bank statements, passport, and visa, where necessary. Having these to hand will save time and could mean the difference between you securing the tenancy or not.
CALCULATE THE RENT BEFORE YOU APPLY
Tenant referencing checks will be looking for affordability, and as a rule, to pass the referencing process; your household’s annual income must be thirty times the monthly rent to get the green light. If the property is on the market for £2,000 per month, you have to prove your household is earning at least £60,000 per annum.
DO YOU NEED A GUARANTOR?
If you've answered the questions honestly, dealt with it quickly, and notified your referees, but you still think that there may be a chance of you failing the process, you should prepare for the possibility that you'll be asked to provide a guarantor. The guarantor needs to be a UK resident, who can prove their ability to pay your rent should you not do so and who will be legally bound to do so.
If you think you will need a guarantor, they will need to go through the tenant reference process in the same way as you do. The only real difference is they will not have to produce references from previous landlords, as they will not be the ones living in the property. However, whoever you select must earn at least three times your annual rent.
A guarantor gives the landlord a safety net giving them peace of mind that somebody else will cover your rent if you can't pay.
Tenant referencing checks include at least one call to your employer and/or previous landlord. Therefore, it is essential to get in touch with your referees and let them know the importance of the call they can expect to receive.
If you need any advice about any aspect of the renting process, we are a London Lettings Agents specialising in flats and houses for rent in Southwark and Shoreditch. Please do not hesitate to contact one of our friendly lettings team.