Published: 26/09/2020Finding the perfect London property to rent is challenging because everybody has different needs and requirements when it comes to renting a property. Once you find the ideal property, there is one final hurdle that stands in between you and your dream home: tenant referencing.
This is when the new landlord or letting agent finds out more about you. It's essential for landlords to establish how reliable you are as a tenant before signing a legally binding contract.
ELEMENTS OF THE TENANT REFERENCING PROCESS
Landlords need to know that you will be able to pay the rent, that you 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
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 eyes, as the quicker the process is completed, the sooner you can move in. Below are a few ways that you can ensure that the application runs as smoothly as possible.
THE FASTER, THE BETTER
The referencing process is the last box that your landlord needs to tick before they can fill their vacant property. It's worth remembering that while there is a void period, your landlord is losing revenue, so it's in their interest to fill the vacancy quickly.
If the application process takes too long, the property owners may choose to give the space to another potential tenant.
Landlords generally employ an external referencing company to complete these checks, and they may follow up on your application with requests for further evidence i.e. bank statements, proof of identity, and other documentation that they need. You should provide this as soon as possible to avoid potential delays in your application.
CALCULATE THE RENT BEFORE YOU APPLY
As a rule of thumb, in order to pass the referencing process, your annual household income must be thirty times the monthly rent. For example, if your rent is £2,000 per month, amounting to £24,000 per year, you will need to show a household income in excess of £60,000 a year.
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 event you'll need a guarantor. This needs to be a UK resident prepared to Guarantee payment of the rent in the event that you fail to do so.
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. However, whoever you select must earn at least three times your annual rent.
The best way forward as the potential tenant is to prepare to be referenced; arrange the required documents, if necessary, secure a potential guarantor, and answer all communications quickly and honestly.
For more information, please contact our helpful central London lettings agents and they'll be more than happy to give you advice.