Should I take these tenants on?

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    Should I take these tenants on?

    I have a 2 bed flat and a couple with a child (recommended by the lady who lives in the flat below the one they want to rent of mine as they are friends) would like to rent my flat. They are currently living in a 3 bed house and the owner wants to sell and has provided a good reference and they were paying around £1950 PCM. My flat will be available for £1450 PCM.

    This issue I have is that I have done a comprehensive check via the NLA checking express service and everything has come up fine except for affordability. The combined verified income is around 33K and the checks mean that they can " afford just under £1000 PCM. One of them is a builder. They have been living in their previous property for almost five years. There are no CCJ's etc. I remember in the past a tenant failed an affordability check done by a letting agent and the difference in what they "could afford" was offset by them paying the difference all up front at the beginning of the tenancy (circa 4K) Is that still allowed with these new rules?

    I note that I can get rent guarantee and some of these services do not take into consideration affordability and the NLA's seems to be one of these, therefore getting rent guarantee insurance and legal expense cover would provide me with financial assurance going forward.

    Should I take these tenants on?

    #2
    I believe you would need to take six month's money in full up front, or it may be seen as a deposit.

    Comment


      #3
      These kinds of "checks" are nonsense without some brain applied.

      Some people have a "verified income" of zero yet £3000,000 in the bank. Don't rely on rent insurance or legal cover to make any decisions - they will not help much when push comes to shove. In general they are money wasted.

      This is another example of how laws punish tenants. In the good old days they might have been perfectly happy to pay rent up front, large deposits etc. to get a decent place to stay - now their leverage is taken from them because those things are scary to get right -- and they are now competing with the general bunch of high-risk tenants even though they may not be.

      Have you seen their bank accounts?

      Comment


        #4
        I would ask to see 6 months' bank statements to see the rent being paid.
        c. £23K rent out of £33K income sounds excessive.

        Comment


          #5
          What does OP think? It is their business decision. We can only advise.

          Comment


            #6
            As said any 'affordability' checks are by nature arbitary.

            They use an arbitary percentage of income to say what someone can 'afford', when of course the person may be quite happy to pay a larger percentage of their income for rent.

            In this case as for the last 5 years they have been managing to pay £500 a month more than your rent will be then I wouldn't see any problem.
            (Always assuming that you are being told the truth).

            Comment


              #7


              Originally posted by chirpatel View Post
              They are currently living in a 3 bed house and the owner wants to sell and has provided a good reference and they were paying around £1950 PCM. My flat will be available for £1450 PCM.

              The combined verified income is around 33K and the checks mean that they can " afford just under £1000 PCM. One of them is a builder. They have been living in their previous property for almost five years
              Maybe the builder does a lot of “cash in hand jobs”.


              Comment


                #8
                He's a builder, probably has more money under his mattress than you or I have in the bank! They charge at least £150 per day here and it isn't a rich area, and he's been paying more than he can afford on paper for the last 5 years. Perhaps find out how good a builder he is, as long as he has a good reputation he won't be short of work.

                Comment


                  #9
                  Originally posted by royw View Post
                  He's a builder,........They charge at least £150 per day here and it isn't a rich area,
                  For an 8 hour day that's only £18.75 an hour, which is fairly low for a builder in the UK.
                  Remember that's not just covering their wages but all their other business overheads as well.

                  According to a major website the average UK hourly charging rates (not wages) for various trades are:

                  Bricklayer £25
                  Decorator £23
                  Electrician £27
                  Gas installer £30
                  Groundworker £21
                  Joiner £23
                  Plasterer £24
                  Plumber £28
                  Roof tiler £22

                  Wish I'd seen that earlier, I've just invoiced £15/hr for doing some basic plans for an extension.
                  (I am not an Architect, they charge £50-£90 an hour).

                  Comment


                    #10
                    Check bank statements to see what they a re actually spending. Ask them outright why their income is more than the verified amount. Then decide what to do next. Something is not adding up because that rent wouldnt leave them much to live on.

                    If he is dishonestly doing a lot of cash in hand work is he going to be trustworthy over your property - and do you have other choices.

                    Comment


                      #11
                      Originally posted by nukecad View Post
                      For an 8 hour day that's only £18.75 an hour, which is fairly low for a builder in the UK.
                      Remember that's not just covering their wages but all their other business overheads as well.

                      According to a major website the average UK hourly charging rates (not wages) for various trades are:

                      Bricklayer £25
                      Decorator £23
                      Electrician £27
                      Gas installer £30
                      Groundworker £21
                      Joiner £23
                      Plasterer £24
                      Plumber £28
                      Roof tiler £22

                      Wish I'd seen that earlier, I've just invoiced £15/hr for doing some basic plans for an extension.
                      (I am not an Architect, they charge £50-£90 an hour).
                      It's all very well quoting this but does he actually work and is he any good. Any good tradesman owns their own gaff I find.
                      Agree with MdeB - see the bank statements or forget it.



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

                      Comment

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