Securing a property to rent
The rental market moves at a fast pace and quality properties are often secured very quickly. If you are moving in with others, ensure you are all in a position to make a decision promptly after viewing the property. So, once you have found a property you want to move into, this is the 'let agreed' stage of the process, but remains subject to contract. This is when you will go and through reference checks, pay a holding deposit. (Equivalent to one weeks rent)
Once you have agreed the let in principal you will be required to provide documentation to confirm your identity and residence. For UK and non UK residents this will include providing an original document from each of the following lists:
- Valid passport
- Valid full UK photo driving licence
- National identity card
Evidence of residency
It is important to note that documentation must be dated in the last six months and the address must match your current address or as supplied on the reference application form.
- Credit card statement
- Recent bank or building society statements
- Council tax bill
- Utility bill
- Mortgage statement
- Current tenancy agreement(signed within the last six months)
- Home service provider bill (for example broadband, digital TV statement) - homeowner’s insurance schedule
- Letter from employer confirming address(signed, dated and printed on headed paper)
- Correspondence relating to local housing allowance or benefit
Tenant and guarantor references
Reference checks are carried out on prospective tenants to confirm that they have satisfactory landlord reference, are in employment and if applicable credit checks are carried to ensure that prospective tenants can afford the monthly rent and have no serious adverse credit history. To pass the referencing criteria between all tenants you must be earning 2.5 times the annual rent.
The holding deposit is refundable, however if you fail the checks, as you have given incorrect information to secure the property it may be withheld, so it is important to have all the facts before undergoing the process. You can ask the lettings agent what criteria need to be met, and if you are concerned that you might fail the checks. The landlord may agree to you having a guarantor.
Referencing criteria for UK and Non UK resident may include:
- Financial background checks
- Up to three years address history check
- List of CCJ and any other adverse credit history
- Voters’ roll check
- Undisclosed address check
- Tenancy application score and fraud score
- Bank details check (account and sort code verification)
- Referencing company’s default database check
- Financial sanctions check(terrorism)
- International Credit Bureau check
- Income verification/employer’s reference
- How long have you been employed?
- Full time and permanent job
- Earnings – can you afford the rental amount, which is usually x2.5 the annual rent or x30 the monthly rent?
- Future employment reference if required
- Affordability check
- Current landlord or managing agent reference
- Has the rent been paid on time
- Has the tenant looked after the property
- Would the landlord let to the tenant again in the future?
Circumstances when a reference company may suggest guarantor may be needed (agreed at the landlord’s discretion).
A guarantor is someone who guarantees financial payments on your behalf – if you fall behind with your rental payments, your guarantor will be contacted for payment. If you think you might need a guarantor, you might want to ask a parent or close family member. The criterion for a guarantor is similar to that of a tenant (refer to ’personal identification section’), but will include proof of property owned within the UK. The guarantor should permanently live in England and Wales. It includes:
- You have an Individual Voluntary Agreement (IVA)
- You are a first time renter
- You are a student
- You are unemployed
- You are self-employed
- You do not hold UK citizenship or having been living outside the UK
- You cannot provide the required confirmation of earnings
Once your reference checks are complete you will be required to pay the difference of the initial funds, which includes the first month’s rent and deposit. All deposits for Asssured Shorthold Tenancies (AST) in England and Wales must be protected by one of the government approved Tenancy Deposit Protection Scheme (TDS).
When you have paid the holding deposit and secured the property subject to contract, the letting agent will draft the tenancy agreement. Once issued, read it carefully through and ask any questions you have before signing and returning it. You should always seek independent legal advice before signing the contract.