Tenant Referencing Process – What Do They Check?

18 August 2021

If you’re looking to rent a property, you’ll have to agree to the tenant referencing process.

And if you’re a landlord looking for tenants, you’ll have to run a tenant referencing process before you let your property.

In this post we’ll explain what the tenant referencing process is, and what it checks.

What is The Tenant Referencing Process?

The tenant referencing process is a means of screening potential tenants. Through a series of checks, landlords and letting agents can ensure that the tenant is who they say they are, and that they have a legal right to live and work in the UK. Tenant referencing checks also allow landlords to screen potentially troublesome tenants – such as those with a history of not paying rent.

Landlords can either carry out their tenant referencing themselves, or they can do it via a letting agency, or a dedicated tenant referencing agency.

Do Landlords Need to Reference Tenants?

Tenant referencing is an essential process for landlords. It minimises risk, and as it makes it more likely that they’ll find reliable tenants who’ll stay for the long-term, it can save them lots of time, energy, and money.

For tenants, the tenant referencing process can be a bit of a pain. But put yourself in your landlord’s shoes. Of course you’re a friendly and reliable tenant who’ll treat the property with respect and always pay your rent on time. But your potential landlord has no way of knowing this. A tenant referencing check just helps them ensure that they can trust you.

Besides – there are some aspects of the tenant referencing process that landlords are required to do by law.

What Do Tenant References Check?

A typical tenant referencing process might involve:

• A right to rent check
• A credit check
• References from former landlords and employers

We’ll go through each of these in detail.

What is a Right to Rent Check?

In England and Wales, landlords have a legal responsibility to carry out a right to rent check. This basically means they have to check any potential tenants’ immigration status, to ensure they have the right to live and work in the UK.

To perform a right to rent check, landlords will need to see certain documents in person, and they’ll have to make and retain copies for their records. Passports, birth certificates, and letters from employers or higher education establishments can all prove that a tenant has a right to rent in the UK.

Though this check isn’t obligatory in Scotland, landlords will still want to confirm a resident’s identity and proof of address.

Credit Check for Renting

Most tenant referencing processes involve a credit check. This is a means of assessing risk through ensuring that the potential tenant will always be able to make their rent and bill payments. Landlords or letting agencies usually use dedicated companies to run credit checks.

The potential tenant will have to agree to the check, and once completed, the landlord will receive a final credit report. This will help the landlord determine whether or not they’re taking a risk in letting to the tenant.

If the landlord or letting agent does not want to run a credit check, they may instead request to see a tenant’s bank statements for the last three to six months. This is just to get an essential overview of the tenant’s income and expenditure, which again might indicate their ability to make rent and bill payments.

Tenant References: Who Do They Ask?

When you apply for a job, you usually have to supply references – people who can confirm your reliability.

You may also have to supply references when applying to rent a property.

During the tenant referencing process, landlords might request references from:

• Former landlords. If the tenant has a history of not paying rent, or of failing to take care of rental properties, then who better to ask than their former landlords?
• Employers. A tenant’s employer can confirm that the tenant is in steady employment, and that they’ll always be able to make payments.
• Tutors. If it’s a student property, a reference from the tenant’s tutor can confirm that they’re in full time education. The landlord might also request to see letters from student finance companies. This will confirm that the student has a grant or loan and, as such, a means of paying rent. Or, they might ask for the tenant to supply guarantors, who’ll agree to pay the rent if the tenant cannot.

How Long Does the Tenant Referencing Process Take?

The tenant referencing process can take anywhere between one day and one week. It all depends on how quickly the tenant can provide all the necessary documents and details, and how quickly the landlord or letting agency acts.

Tenants can speed up the process by gathering everything they’ll need for the reference check in advance. They can also make things easier if they gather the deposit and a few months’ rent in advance, ready to transfer at a moment’s notice. Finally, they can arrange for tenant house and contents insurance, to guarantee total peace of mind from the moment they move in.

When the Tenant Referencing Process Doesn’t Work

If a potential tenant fails the tenant referencing process, they can always cut their losses and move on, and try and find somewhere else to rent.

But past behaviour isn’t always a good indicator of future behaviour, and a tenant’s circumstances can change at a moment’s notice. The tenant referencing process can help landlord’s manage risk, but it doesn’t remove risk entirely. So what happens when the tenant referencing process lets landlords down? What can landlords do when faced with a tenant who cannot or will not pay rent?

This is where landlord insurance can make a huge difference. A good landlord insurance policy can include cover for loss of rent, as well as rent guarantee insurance. That way, even if your tenants don’t make their rent payments, you’ll see no interruption to your rental income.

Landlord insurance, combined with tenant referencing, acts as an essential safety net for landlords. At Hazelton Mountford, we specialise in providing landlords in Worcester and beyond with affordable yet comprehensive insurance cover. Get in touch for a free quote.

Tenant Referencing for Letting Agents

As well as private landlords, tenant refencing checks are also used by letting agents to ensure that they get the right tenants. At Hazelton Mountford we work closely with Letting Agents to ensure a smooth and thorough referencing checks process is completed. We are more robust than most on the market and all our agents are assigned their own dedicated account handler who work on a daily basis with their agents taking them through the checks. We offer a range of options including a full reference service, referencing software and pre-screening.

Find out more about our tenant referencing for letting agents.