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What kind of references do landlords ask for?

May 25, 2020

What is referencing for?

Landlords typically ask for references from their tenants to make sure they can afford the property and will look after it properly.

We recommend that all landlords carry out a set of financial and background checks, which they can do through our referencing process. And in fact these checks are essential for any landlord wishing to take up rent guarantee protection, which can't be issued without tenants having passed a referencing process that is approved by the insurer.

In addition to the salary checks, our referencing partner will also try to get in touch with previous landlords / estate agents to check that the prospective tenants left their previous rental property in a good state and without being in arrears with their rent.

It's also worth noting that since the legislation changed a few years ago, landlords are obliged to cover the cost of reference checking, and can't charge tenants for this.

What financial criteria do tenants need to be able to show?

Our referencing partner carries out a number of checks, but the most important one is that the tenant has a gross salary of 2.5x the rent (or share of rent), and that their employment is likely to last for the duration of the tenancy.

If tenants don’t meet these criteria, they may be able to provide a guarantor, who must be a UK based family member with a gross salary of 3.75x the rent.

The tenant and guarantor must have also have a reasonable credit score, with no adverse credit history (such as unsatisfied CCJs or bankruptcy).

If tenants do not pass our referencing partner’s criteria, the landlord may consider accepting rent in advance.

What happens if the tenants fail the referencing process?

Both landlords and tenants should make sure that the prospective tenants are likely to pass the financial tests before they start the referencing process. Tenants should be confident they can show that their gross salary is 2.5x their share of the rent and that they can show they are in full time employment and have no adverse credit history.

If no viable way forward is agreed between the tenants and the landlord, we will normally refund the holding deposit to the tenant. However, if the tenant has knowingly provided misleading or incomplete information, then in some circumstances the landlord may be entitled to keep the holding deposit. 

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