Potential Tenants keep failing referencing - 3 lots in a row...

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    Potential Tenants keep failing referencing - 3 lots in a row...

    I have a property which I am using an online agent to market who do the usual 'Referencing checks'. However I am finding that the last 3 tenants we have tried referencing for have all failed, even their Guarantors have failed referencing.

    At this rate my property which normally goes like a hot cake in an affluent area has been on the market for 2 months due to all these potential tenants failing the checks. Are the checks too stringent? I obviously wouldn't be able to get rent guarantee insurance.

    Their incomes are all verified, they don't have bad credit. However they appear to be 'declined' on rent affordability, not sure why as they appear to earn enough. I know I can still accept them but in a worse case scenario could I legally chase them for non rent payment if it ever came to it? even though their references had been declined?

    Otherwise at this rate I could be referencing potential tenants for months on end!!!

    #2
    Maybe ask to see 3 months worth of bank statements and take it from there?

    Next year my niece and her future husband are taking one of my properties. I know he would fail a credit check or have no real credit history as he has lived at home all his life and never got anything on credit but between them they will pull in about £2500 a month between them.

    I told them both years ago get a credit card to build up your history so when you eventually get married and move into together this will help make your lives easier. But he didn't listen

    Comment


      #3
      If the property is somewhere with high and rising rents it's quite likely that very few people could pass an affordability test.
      The proportion of income needed for rent is more than the insurers will allow.

      Nothing about their credit rating affects your ability to pursue them for anything owed, though.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Perhaps try referencing one ("best" one) with some other referencing agency - see what result you get.

        You don't HAVE to only take applicants who pass referencing. My best ever tenants complete referencing process was a neighbour saying to me "Mr Artful they very nice people" - and they were! There was no way they'd have ever passed a normal reference check (recent arrivals UK, a couple renting a room cash-in-claw from someone's tenant...).
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          Originally posted by Mavis808 View Post
          Their incomes are all verified, they don't have bad credit. However they appear to be 'declined' on rent affordability, not sure why as they appear to earn enough.
          Industry standard income to rent ratio is 2.5 x. (I generally go for 4x)

          If they are being declined on rent affordability once it has been checked with their employer, then they may have been lying on their application.

          Look through their application before submitting, make sure they qualify and make it clear to them they will lose their fee if they've been untruthful. Checking bank statements as suggested by Raiden is advisable.

          I have a property which I am using an online agent
          Tends to attract the chancers. Will get worse when a complete ban on fees comes in and they have nothing to lose.

          Comment


            #6
            Another possibility here is that you are setting the rents above the market rate for the area.

            Comment


              #7
              I agree with Boletus on the 'chancer ' angle. I have tried and failed in 2 major cities to find tenants with online agents. The quality of the applicants was dreadful. They either did not turn up or if they did then revealed they had multiple kids and/or pets + being in receipt of HB. I suppose you can't blame them for trying but it is time wasting to the landlord looking for a specific profile of tenant.

              Suggest you use an agent Mavis808 and they will sort out those likely to fail checks.



              Freedom at the point of zero............

              Comment


                #8
                There's something off about online agents (particularly the commisery people).
                I'd want to see numbers - proper numbers of clients and transactions.

                Traditional agents are either successful or they close down (shops and staff being expensive).
                If you're trading without shops and people, your cost base is lower, so your rates can be cheap - but I have a feeling that you pay the fee, fail, and switch to a more traditional route to actually transact.

                The business model seems to be to set the initial fee at a level that people just write off to experience.
                Once everyone's learnt, they'll move on.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Of course the other thing you could do it make the prospective tenant pay for the referencing of themselves and guarantor....that should sort out wheat from chaff.



                  Freedom at the point of zero............

                  Comment


                    #10
                    Originally posted by Interlaken View Post
                    Of course the other thing you could do it make the prospective tenant pay for the referencing of themselves and guarantor....that should sort out wheat from chaff.
                    Until the Tenant Fee Bill becomes law.....
                    I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                    I do not answer questions through private messages which should be posted publicly on the forum.

                    Comment

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