If you are a landlord reading this, see our comments below, but for now I would like to talk to our tenants, or potential tenants. 

The simple truth is that letting agents are instructed by landlords and our primary duty of care is to the landlord and this includes a duty to look after their finances and act in their best interests, within the law.  At our best, letting agents are professional organisations belonging to a professional body (in our case ARLA Propertymark) and abiding by a code of practice and accountable under that code.

 

Hopefully this is not sending you to sleep too much and helping you understand how we work and why we do things as we do. The relevant bit of the code in dealing with tenancy applications says;

 

11b You must take references on a tenant or guarantor appropriate to the circumstances of the application and in line with the criteria agreed with the landlord. This should include proof of identification; proof of residence; credit check and proof of income. Your own referencing procedures should usually be by way of a Referencing Service provider or by direct application to third party referees or any combination of the above.

 

So in other words, prior to offering a tenancy we are obliged to check that the person asking to move in can afford the rent and is unlikely to leave with rent arrears. In practice, or overseas applicants, and students we will always require a UK guarantor. Failing that we can accept payment in advance for the full term (not just, for example a few months) or an international guarantor via one of our partner services. They charge a fee but if you can pay in advance or have a UK guarantor you don’t need them, so think of them as a fallback plan.

 

We are often told something like “you don’t need to worry about the rent” or “my word is my bond” but in reality this would require us to accept the word of somebody we don’t know instead of carrying out our professional duties, so it is not really something an applicant with nothing to hide should say to a letting agent. In fact, if we are honest it tends to ring alarm bells, just so you know.

 

We always aim to treat people with respect and in accordance with our legal duties under the Equality & Human Right Act (in fact, these things are quite important to us, we are citizens too) but sometimes we find ourselves having to decline applications because an applicant fails referencing.

 

We are not obliged to reference (but we won’t discriminate either directly or indirectly) and we will only put you forward if we are reasonably satisfied you meet the criteria, including for example affordability criteria. 

 

It is worth knowing what these are since they can be a stumbling block. In simple terms, if you are relying on your own income, we expect to see you having a take home income of;

 

Bills included, for example rooms in shared houses; at least TWICE the rent- so you take home £1000 per month if the rent is £500 per month

 

Bills excluded, (for example a flat or house) At least 2.5 times the rent- so you take home £1500 per month if the rent is £600 per month

 

Guarantor at least THREE times the rent so you take home £1500 per month if the rent you are guaranteeing is £500 per month.

 

So what does all of that look like? 

Our external referencing agency, usually Goodlord or Vouch, will carry out an income check via an online process. The fastest way to prove this is to allow them one time access via a process called “open banking” a bit like an electronic check of your bank statement in real time, but don’t worry they cannot access your money and they are regulated ty the Financial Conduct Authority.

 

If you have a poor credit history particularly bankruptcy or county court judgements you will also usually be declined.

 

Prior to referencing you will be asked to make a holding payment.  It is very worthwhile reading the terms under which this payment is made, but the two points we would like to draw your attention to here are, if you make a misleading statement or if you change your mind, you will usually lose all or most of your holding payment.  This is because it costs both to access the referencing service, and for  the time of the people who have processed your application, which will have been wasted if you choose not to proceed. 

 

This is why you will be asked some questions to ensure the property is right for you (you can afford it, it meets your needs) before you proceed.

 

A couple of other tips if we may, since the world if full of fraud.  Please never send money for a viewing, never send money to anyone who promises to post you the keys and always use a reputable letting agent unless you can check the landlord owns the property (it cost £3.00 to do this online). No genuine landlord or agent will object to this and remember if an offer seems too good to be true it probably is not true.

 

Looked at this way, a letting agent is not a pain, it is a sensible cautious step for applicants looking for a great property.  Please see our other blogs to find out more about how we check your property meets all the relevant legal standards, and if you are a landlord, how we can help you bring your property to market avoiding legal pitfalls and making sure do find a tenant who can and will pay the rent on time

The full code of practice for letting agents is here;

 

https://www.tpos.co.uk/images/Codes_2019_a5/TPOE22-7_Code_of_Practice_for_Residential_Letting_Agents_A5_-_Effective_1_June_2019.pdf