Monthly Archives: February 2012

Why is Tenant Referencing so Important?

Your property is probably one of the most expensive things you own, so you don’t want just any one moving in.

Referencing is the best way to protect yourself against bad tenants, ensuring that they are who they say they are, giving an insight into their ability to pay the agreed rent and their history of paying rent in the past.

First and foremost, ensuring that the tenant is who they say they are is very important. A tenant giving false details is obviously indicative of potential bad intentions. It is also important to establish identity in order to ensure that the contract is enforceable.

A good reference should include both employer and landlord references (although these may not be available if you are renting to a social housing tenant, or if the tenant has not previously rented).

The reference should include details of any bankruptcies and CCJ’s and previous credit history, which will indicate whether they have failed to pay bills in the past.

Your reference check should include a confirmation of their employment status and current salary, which in turn enables you to identify whether they are able to afford the monthly rent.

We offer a comprehensive referencing service which covers all of these important areas, and costs just £39 per reference, but is free to landlords who use our free tenant find service.  Our Tenant Referencing Report provides a clear indication of whether or not your potential tenant has met our criteria, allowing you to let your property with confidence.

Additional information which you may request from tenants is 3 months bank statements, showing monthly incomings/outgoings and also next of kin details, which can help if you can’t get in touch with your tenant directly.

If your tenant fails the credit check, it can be prudent to consider why, and how serious this actually is. For example, if they have a CCJ or were declared bankrupt, they will automatically fail the credit check. If the reason for this was that they were made redundant during the recession, but they have now had a full time job for two years and are easily able to cover the cost of their rent with their income, and have good references, perhaps it is worth considering allowing them as tenants, but with a guarantor.

A guarantor is a person who you, as the landlord, can ask to pay the rent if the tenant fails to do so. Of course, it is important that the guarantor also passes a reference check.  If you are using our referencing service, and a tenant fails, but you would accept them with a suitable guarantor, we will reference check the guarantor on your behalf.

Often a tenant with a poor credit history will offer to pay a number of months rent in advance, or pay a larger deposit. Although this is clearly a sign of good will, it may be better to ask them to pay the LAST month’s rent in advance instead, and have this written in to the contract. Unless otherwise stated in the contract, you cannot take money from the deposit to pay rental arrears.

If you do not feel comfortable with a tenant, their reference, or the option of a guarantor, you should not accept them as a tenant. It is better to reject a tenant, and restart the process than leave yourself open to a potential bad tenant.

Rents Rise in January

The trend of rising rents continued in January, despite it being a month that traditionally sees a drop in rental prices. This is the first time in the history of LSL Property Services collecting monthly rent data that they have seen an increase in rental prices in January. In January, LSL Property Services reported a… Continue Reading

Rents On The Way Up After Seasonal Drop

The usual seasonal drop off in rents has almost come to an end, according to the latest figures from the rent index. The rent index tracks actual rents in real time, using information gathered from more than 5,500 landlords over the past 90 days.  It shows that the average rental price paid has increased by… Continue Reading

Number of BTL properties increased by 84,000 in 2011

According the latest data from the Council of Mortgage Lenders, the number of properties being bought with buy-to-let mortgages increased by around 84,000 in 2011. During the fourth quarter of 2011, a total of 34,800 buy-to-let mortgages were advanced (a total value of £4 bn).  This was almost identical to the third quarter figures (34,300… Continue Reading

Statistics: Private Rental Sector vs. Social Rental Sector

Following the release last week of the 2010-2011 English Housing Survey Report, we can see the difference between the private rental sector and social rental sector. The social rented sector accounted for 17.5% (3.8 million) of households and the private rented sector accounted for 16.5% (3.6 million) of households Over half of all private renters… Continue Reading

English Housing Survey Report Summary

The Department for Communities and Local Government has published the English Housing Survey (EHS) Headline Report 2010-11. A summary of the key findings are as follows: Average weekly rents in the private rented sector continued to be well above those in the social rented sector (£160 per week compared to £79). 63 per cent of… Continue Reading

RLA Defends Good Landlords

Responding today to Shelter’s five point plan for tackling “rogue landlords”, the Residential Landlords Association (RLA) has called on local authorities to more effectively root out those who flout their obligations under the law. The RLA says that according to the Government’s English Housing Survey 84% of the over 8 million private rented sector (PRS)… Continue Reading

Shelter Calls for Tougher Sentencing for Serial Rogue Landlords

Shelter is asking Grant Shapps, the Housing Minister, to keep the Government’s promises in their Housing Strategy in November 2011: to ‘deal with rogue landlords’ and ‘tackle dangerous and poorly maintained homes’. Despite the Government’s assurances, Shelter says that rogue landlords are still cashing in on the high demand for rented homes, and trapping families… Continue Reading

FSA Publishes Damning Report on Sale and Rent Back Firms

The Financial Services Authority (FSA) has published a report which reveals that most sale and rent back (SRB) transactions were either unaffordable or unsuitable, and should never have been sold. Firms in the SRB sector faced floods of complaints for offering last-chance below market value deals to home owners facing bankruptcy and repossession. The firms… Continue Reading

Winter Weather Advice for Landlords

With the cold weather upon us, it is time to consider how to protect your buy to let investment against weather damage. If your property has a tenant in situ, you can begin by arranging a mutually convenient time to visit, and make checks both internally and externally. Pipes and tanks in the loft should… Continue Reading