Before renting a property, every tenant must go through a process of referencing and credit checks. It is a significant hurdle that needs to be overcome and is essentially to check that they are who they say they are and that they can afford the monthly rent.
What checks are carried out?
During the referencing process, the following checks will be carried out. Often, this is done by a specialist company and the exact process will depend on the circumstances of the prospective tenant (eg employed, self-employed, student, in receipt of benefits etc).
If the tenant is employed, they will need a written reference from their employer, along with details of their contract, how long they’ve been employed, salary etc. A self employed tenant will need to submit evidence of their earnings from a chartered accountant. A tenant is deemed to be able to afford the property if the rent is less than approximately 35% of their gross monthly income.
A full credit check will also be done, for at least the last three years. Plus a written reference will be sought from the tenant’s previous landlord.
If the checks reveal any issues, the landlord may seek a guarantor for the tenancy, or the tenant may fail completely and have to find alternative accommodation.
As with many parts of renting, it is best for the landlord to be upfront about what information is required, and for the tenant to be forthcoming with any possible problems. This can help to ease any possible issues before they become a barrier.
