A Tenant Guide to Referencing
Your application to rent your new home has been accepted… now all you have to do is pass the reference checks. We know that referencing can be a stressful time for tenants so we have put together some tips to help you make sure the process goes as smoothly (and as quickly) as possible.
Why do I need a reference check?
Reference checks are an important step for your landlord to ensure that you are a suitable tenant for their property. For the majority of landlords, a rental property is a significant investment, and in some cases has been their home; referencing provides reassurance that you can afford the rental payments and will look after the property.
At Clan Gordon, we reference check all adults who will be living in a property. Once your application has been approved by the landlord, you will be sent a reference form to complete. Our reference checks are carried out by a third-party company and include:
- Credit check
- Bank validation check
- Background search
- Financial sanctions check
- Current landlord reference
- Employment check
- Affordability calculation
What can tenants do to help with referencing?
Reference checks tend to take only a few days, but we know it can feel like longer when you are waiting to hear if your application has been successful. There are a few steps that tenants can take to help the process along:
Check your affordability
The first step when looking to rent a property is to work out what you can afford to spend on rent each month, this will help to guide your search. The affordability check, included in the reference check, ensures that your income will sufficiently cover the rent payments. To pass the affordability check, your gross combined annual household income must be more than 30 times the monthly rental amount. For example, to rent a property at £1,000 per month, your household income must be at least £30,000 per year. If you are concerned that your income will not meet the affordability criteria, speak to the landlord or letting agent, it may be possible to support your application with a UK based guarantor.
Be completely honest
It can be tempting to withhold some information – such as adverse credit – when applying for a rental property. However, this will be checked during the referencing process, so it is better to disclose everything upfront, giving time to find a solution. A poor credit history does not automatically mean that your application will be declined, but trying to cover it up may not reflect well on you.
Have a guarantor
If you are unsure if you will pass reference checks on your own – perhaps due to recently changing job, being self-employed or having lived abroad – it is best to find a guarantor in advance, so as not to delay the referencing process. A guarantor is usually a parent or guardian but can be anyone living in the UK who is willing to agree to take on the responsibility for paying your rent, or for damage to the property, should you fail to do so. Your guarantor will be referenced in the same way as you, so will be required to undergo a credit check and provide an employment reference. Let your guarantor know in advance so they can have the required information ready.
Pre-warn your referees
In order to rent a property, you will typically require a reference from your employer and, where possible, a previous landlord. Waiting for a response from referees can cause some of the biggest delays with reference checks. Finding out your HR contact is on annual leave days after the reference request has been sent can lead to unnecessary hold-ups and chasing on our part. It is always a good idea to contact your referees in advance so they know that their input will be required and an alternative can be arranged if they are not available.
Have your paperwork ready
You will most likely be asked to provide some (or all) of the below documents to support your reference application. As you may not usually have all of these immediately to hand, it is helpful to have your paperwork ready at the beginning of the process to avoid delays.
- Bank account details or bank statement
- Passport (and any relevant visas to prove your right to live in the UK)
- Copy of employment contract
- Proof of current address – driving licence or utility bill