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The Tenant Referencing Process Explained

You’ve found your ideal property to rent in London and agreed the terms, but you can’t call it home just yet – you must pass the tenant referencing process first.

The Tenant Referencing Process Explained

Referencing is the process a landlord or letting agent actions to ascertain and verify pertinent information about you – the prospective tenant. By confirming this information is correct, they can make an informed decision about whether you are suitable for their property.

Some landlords and letting agents use the services of a professional tenant referencing company to complete this vital process. This can often be completed entirely online, with a turnaround time of 2-3 days from receiving the appropriate permissions and documentation.

Why is it required?

Having passed the relevant checks, the landlord can be confident of the following:

  • You are legally able to rent in the UK
  • You earn enough money to cover the rent, and you’ll pay it on time‍
  • You will keep the property in good condition throughout the tenancy
  • You will be respectful of your neighbours

What do they check?

The type of referencing you will be asked to provide might vary depending on your status – such as a student, full-time employee, or self-employed. The checks that will be completed fall into two categories: mandatory and best practice.

Right to rent (mandatory)

Landlords are legally obliged to check you have a right to rent in the UK by verifying you’re either a British citizen or you’ve been granted legal right to live in the country. This requires you to provide proof of identity (such as your passport), previous address history and other documents that prove your right to rent in the UK.

You can complete this online if you:

  • Have a biometric residence card or permit
  • Have settled or pre-settled status
  • Have applied for a visa and used the ‘UK Immigration: ID Check’ app to scan your identity document on your phone

Employer reference (best practice)

To ensure you can afford the rent and can pay on time, the landlord will contact your employer to confirm your income if you’re a full-time employee. They typically require that your income is at least 30x the monthly rental rate – for example, if your rent is £800 per month, you’ll need to earn at least £24,000.

You might also be required to provide bank statements – usually the previous three months – so they can gain better visibility of your financial situation

Credit check (best practice)

This is required to prove you have a good credit history, meaning there is evidence you have a record of paying bills on time. It won’t affect you if you’ve never had credit before, which is very likely if you are moving from overseas!

Previous landlord reference (best practice)

If you’ve rented a property before, your previous landlord will be contacted to provide a reference covering details like timely rental payments and your general conduct while a resident.

If you haven’t rented before, the landlord may just ask for proof of income, or they may require you to provide a guarantor as well.

Anti-money laundering (mandatory if you meet certain criteria)

Letting agents must comply with anti-money laundering rules and regulations and conduct additional checks (called customer due diligence) on the tenant and landlord for any agency agreement with a monthly rent of £10,000 (or equivalent amount) or more. Some agents might apply a lower rent threshold or ask for additional documents that must be certified by a solicitor or a notary.

‍Are there additional charges?

Under the provisions of the Tenant Fees Bill 2019, landlords in England can no longer charge tenants for reference checks, whether they pass or fail. The cost must be covered by the landlord or letting agency.

Good luck with securing the perfect home in London!

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