What is a tenant reference?
Before any tenant moves into your rental property, it is advised to complete the relevant checks to ensure that a tenant is going to be respectful, dependable, and courteous to neighbours or housemates. Although it is impossible to guarantee that a tenant will be these things, a referencing check will help you reduce this risk and provide reassurance that you are onboarding a “good” tenant by looking into their history. Some buy-to-let mortgage lenders will also look to confirm you have completed these checks before a mortgage is agreed upon.
We will look at the individual steps taken by Tenant Screening when conducting a Full Tenant Profile check.
Interim Report (Credit History)
The interim report is made up of multiple factors to understand the creditworthiness of an applicant. This includes a bespoke and tailored credit score provided by Equifax (different from the standard credit score you would receive from Equifax), which also includes confirmation of any CCJ, IVA, or bankruptcies, either satisfied or unsatisfied, during the past 7 years. Included in this is an ID and address verification, confirmation if the individual is on the electoral roll (for residency and ID verification), confirmation that the applicant’s name and DOB are matched on any credit applications, followed by a check to ensure that they do not have any alert indicators such as CIFAS, Halo deceased, HM Treasury Sanctions, and finally PEP listing.
Income Verification (Affordability)
We will look for evidence of the applicant’s employment, ideally directly from an employer or via the most recent payslips. If an applicant is due to start new employment, we will gather the employment contract and offer letter and, where possible, confirm with the future employer. If an applicant is self-employed, we will look to verify via an accountant’s reference, bank statements, and last year’s tax return. Finally, if an applicant is not working, we will look to obtain evidence of benefit and/or pension payments. Once income is confirmed, we will confirm affordability via the industry standard metrics (x25 monthly rent as annual salary if bills are included or x30 multiple if bills are not).
Landlord Reference (Good Tenants)
If an applicant is moving from a rental property, we will obtain a landlord reference either via email or over the phone to confirm that they are good, reliable tenants. This includes verifying that they are respectful, clean, and tidy, make rental payments on time, are respectful of neighbours, and have had no known disputes with utility suppliers. We will also look to identify if the landlord expects to return a full deposit, if an applicant smokes, and if they have any pets. This reference essentially provides a thorough all-round reference of an applicant during their current tenancy.
Right to Rent Check (Compliance) - Optional Extra
As of February 2016, the Home Office introduced a new check that is required for all new tenants to ensure that they have the right to reside in the UK. This check can be completed by landlords themselves or through a third party, such as Tenant Screening. For British passport holders, the check can be completed using the prospective tenant’s passport, and for non-British passport holders, additional checks are required using their passport and their right to rent share code. It’s worth noting that by law, the right to rent check needs to be completed before a tenancy begins, with penalty fines up to £3,000 per tenant and, in the worst scenarios, a criminal record and prison sentence possible for non-compliance if checked by the Home Office.
Summary
Once all the tenant screening is completed, we will make a recommendation based on the factors identified during the referencing. This will essentially result in a pass, a guarantor being required, or a fail. Throughout the process, you are able to log into your dashboard and see current progress and action notes. You can raise questions online or contact one of the team members at info@tenantscreening.co.uk or by calling 01793 847014.
With a full tenant profile check costing from £22.95 (ex VAT), we prove to be a cost-effective solution to verifying your prospective tenants. To create an account, please select the register button via www.tenantscreening.co.uk.
