Referencing for Renting: The Key to a Successful Tenancy

Let’s face it, admin tasks can often seem like a drag, and tenant referencing checks might not be the most thrilling part of renting. But here’s the thing: getting this step right is crucial for both landlords and tenants. A thorough referencing process not only helps landlords avoid potential issues but also ensures tenants secure their ideal rental property.

Staying on top of the latest in tenant referencing is essential. Here’s a quick guide to understanding the process and a handy checklist for both tenants and landlords.

What Does ‘Tenant Referencing’ Mean?

Referencing is a process carried out by a landlord – or the lettings agency working on behalf of the landlord – to learn about an applicant’s background. It’s designed to identify tenants who are likely to pay rent on time, be respectful neighbours, and take good care of the property.

This process helps screen out individuals with poor financial records or problematic rental histories, ensuring a smoother experience for everyone involved.

Tenant Referencing for Landlords

Right to Rent check is a mandatory check, but there is no legal requirement for a landlord to carry out any other referencing procedures. However, we would strongly advise landlords to take the steps listed below when considering an applicant who wants to rent their property.

Landlords who are unlucky enough to take on an unsuitable tenant may end up spending considerable time and money to remove them and repair any damage.

Referencing checks offer some assurance that your new tenant will pay the rent on time and take care of your property as if it were their own. 

Steps Towards a Successful Tenancy

1) Credit Score

A credit score check reveals a lot about an applicant’s ability to handle money. This important report gives a general overview of a tenant’s financial history, including any late or missed payments. It will also flag up previous bankruptcies, IVAs or CCJs going back over six years.

2) Landlord references

When you apply to rent a property, you may be asked to provide the contact details of your previous landlord. This is because the landlord or letting agent of the property you would like to rent wants to know about your history as a tenant.

3) Income guarantee and employee reference

Landlords or their representatives should also carry out a tenant affordability check. This involves confirming the tenant’s level of income with their employer to prove that they will be able to afford the monthly rent. Your employer may also be asked for a character reference.

4) Right to rent check

Landlords letting properties in England must check an applicant’s documentation to confirm that they are legally allowed to rent here. Failure to do so could result in a fine of £3,000 for each tenant or a prison sentence. The government has issued a checklist for landlords which tells you how to carry out a Right to Rent check.

Tenants’ Guide to Passing a Reference Check

There is a certain amount of work involved in providing the information required for references, but these days, online tenant referencing makes it easy to submit your details. Even if your track record has been less than perfect, there are things you can do to increase your chances of success:

• Take simple steps to improve your credit rating, such as paying all accounts on time and in full. Credit experts Experian have a range of suggestions you can use to improve your score.
• Demonstrate to your employer that you are honest, reliable and responsible in the workplace.
• Ensure you can produce documentation that proves you are eligible to rent a property.
• Maintain a good relationship with your current landlord, as this will help with referencing when the time comes for you to move on.

Landlords’ guide to referencing help

Landlords can either apply for references directly, subscribe to a professional referencing service or use a letting agent to carry out the work.

• Using a professional referencing service can cost between £15 to £50 per tenant. However, many landlords prefer to form their own judgements by collecting references themselves.
• Following up references yourself may save money, but it is not cost-free, as you will need to pay some fees (a basic credit check can cost up to £20).
• Letting agents are well-placed to conduct reference checks as they have years of experience dealing with tenants. This means they can spot potential red flags that may not be evident to less experienced landlords.

If you would like help to find and reference suitable tenants for your Central London rental property, we would be delighted to help. Simply get in touch with our ARLA-qualified agents in Westminster, London Bridge or Kennington and relax as our friendly, professional staff get to work.