Understanding Tenant Referencing: What's Checked Before Every Deal

Tenant referencing is a crucial step in the renting process that helps landlords make informed decisions about potential tenants. At PropertyLoop, we partner with a trusted third-party referencing company to conduct thorough checks on all applicants. Here's what the referencing company assesses before providing reference reports to landlords:


ID and Right to Rent Checks: Applicants must provide valid identification that matches the name on their application. If there has been a name change, proof of the change must also be supplied. Additionally, for applicants renting in the UK, Right to Rent requirements are assessed through immigration checks to verify if they have the legal right to reside in the country.


Credit Checks: Credit checks are performed by Equifax to examine the credit repayment history of applicants. The aim is to identify any current or past adverse credit situations. The referencing company also verifies if applicants or guarantors have lived at the addresses they stated in the past 3-6 years. Applicants are expected to have no adverse credit, or if they do, it must be less than £1000 and fully satisfied. It is vital for applicants to declare any adverse credit beforehand on their application to avoid issues during referencing.


Income and Employment Verification: Applicants need to provide proof of employment and income, which includes a reference from their employer. For those about to change jobs, contact details of their future employer(s) are required. Income is verified to determine if applicants can realistically afford the property. The industry-standard affordability ratio needed is 2.5 for tenants and 3.0 for guarantors, meaning their income should be at least 2.5 times the annual rent (3 times for guarantors) to meet affordability criteria.


Residential Status: The referencing company confirms the residential history of applicants or guarantors. This includes their current residence and any addresses they lived in the past three years. Behaviour as a tenant is also evaluated. If applicants are not currently renting or cannot provide their landlord's contact details, further investigation may be required.


Tenant referencing is a comprehensive process that ensures the suitability of potential tenants for a rental property. By partnering with a reliable third-party referencing company, PropertyLoop ensures that all applicants undergo rigorous checks to provide landlords with accurate and insightful reference reports. These checks help landlords make well-informed decisions and find the best-suited tenants for their properties.