Question:
‘Hi Andy,
I want to
move out of my parents’ house for the first time and into a rented house, but
because it’s my first time renting that I’ll struggle with references with
landlords and agents. What do agents and landlords want from references and
what do I need to pass references?
Thanks,
John’
Andy’s Answer:
First of
all, good luck in finding a new home! There are many parts to references but
hopefully I can put your mind at ease.
I would say
there are four main components to references: affordability, credit checks,
income references and landlord references. Obviously if you have never rented a
property before then you won’t have a landlord, so this part wouldn’t apply to
you at the moment.
Agents and
landlords should also check your eligibility to reside in the UK with what’s
called a ‘right to rent’ check. This is pretty simple and you can use a range
of documents to show this – the simplest being a passport/identification card
and visa if applicable.
Affordability
The standard
test for affordability is that your annual income must be 30x the monthly rent.
For example, a property which is £500pcm would require an income of £15,000 per
annum. If you were moving in with someone else, the income between you per year
would have to reach that total. This is to ensure that the rent is affordable
for you.
Credit Checks
A credit
check is normally conducted to check that you have no history of unsatisfied
county court judgements (CCJs), insolvency voluntary agreements (IVAs) or
bankruptcies.
Dependant on
the landlord and on the agent, if an applicant has a CCJ, they may accept your
application subject to some criteria – the total is under a certain amount, it
isn’t for unpaid rent, even if you have been making regular payments towards
the debt and can substantiate that, etc.
In some
cases, some agents/landlords will accept a failed credit check with a
guarantor. However, in most cases, the guarantor must be a homeowner, pass the
same affordability and income references as a tenant and then sign a deed of
guarantee for the tenancy.
Income References
Your income
references link in to the affordability checks.
If you are
employed, your annual income will be checked, your contract length (whether you
are permanent or temporary staff and to ensure your contract runs for at least
the term of the tenancy). Your employer will also most likely be asked whether
they consider you to be a trustworthy individual.
If you are
self employed, to pass references you will normally need at least 12 months
worth of accounts. Providing your accountants’ details is normally required in
conjunction with bank statements and self assessments to evidence your income.
For those
applicants who are in receipt of benefits, they will need to produce awards
letters to evidence that part of their income.
While this
is not an extensive list of applicant’s situations, these are the most common
ones.
Landlord References
Landlord
references are normally comprised of the following questions:
·
Start date of
tenancy, length of tenancy and end date of tenancy (if notice has been given)
·
Rent during the
tenancy
·
Were there any
rent arrears during the tenancy
·
Were there any
late payments/issues with rent payments
·
Were there any
damages during the tenancy/general condition of the property during the tenancy
·
Would you rent to
this tenant again
·
Any other
comments
This appears
like a lot of information, but your agent or landlord should be able to talk
through their specific requirements with you and help you in your applications.
I wish you the best of luck house hunting!
If you have any further questions, feel free to drop me an email or give
me a call. Email me on andy@hamletwarrington.co.uk or call on 01925 235338. If you
are in the area, feel free to pop into the office – we are based on 6
Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and
the kettle is always on.
Don't forget to visit the links below to view back
dated deals and Warrington Property News.
No comments:
Post a Comment