Tenant Referencing Checks

Tenant vetting or tenant referencing will involve a series of checks to determine if someone will be a reliable and responsible tenant. The reference will include various background checks such as employment status, identity checks, credit checks and references from past landlords.

The tenant referencing process shouldn’t usually take more than 48 hours once the referencing agency has received permission from the tenants to perform the checks. It may take longer to get the results of the reference if the tenant’s previous landlord or employer does not respond quickly.

Yes, landlords can use third party credit agencies to run credit checks on potential tenants, but only if they have written permission from the tenant. Most landlords will perform a credit check on potential tenants as part of the tenant referencing process during their rental application.

In most cases, the tenant will be expected to pay a non-refundable fee of anywhere from £15-£70 for referencing checks. However, some landlords prefer to cover the costs of tenant screening themselves, which is why TheHouseShop let landlords choose who pays for tenant referencing.

Tenant referencing can take longer and even result in the tenant failing if their employer takes too long to respond to send the proof of employment letter to the tenant referencing agency. More often than not companies have a downloadable template employees can use to submit to their boss or HR department to complete and is accepted from the tenant referencing agencies.

However, problems can occur for freelancers who don’t have access to this type of document.

Freelancers can instead draft a letter on company letterhead and submit either a soft or hard copy to the agency direct form your work email address. The best way to save time is to make sure that the soft copy is a pdf document, instead of a word document, when you attach it in an email. This should be sent back to the tenant checking agency as a pdf document and not as an attachment in a word document.

It is advised that tenants chase their employers to make sure that they send the letter off in good time so they avoid missing out on getting the property they are applying for.

Tenant referencing can be held up if the current or previous landlord drags their feet with sending in their reference. This is usually because they aren’t aware of what they need to state in their reference and unwittingly they hold up the referencing process and even can cause you to miss out on your property.

Remember that most landlords will have a normal 9-5 job as well as their property management to deal with. Therefore they may take a few days to get back to you. Try and make it as easy as possible for them by providing a template and clearly explain what you need to cover in the letter and allow a fair amount of time for a reply.

Make sure that you don’t just rely on their word or by sending texts and emails, often landlords are busy or abroad and can miss emails without realising that they have an urgent message in their inbox. It is far better to arrange to speak to them over the phone, regarding sending in a reference, as this will also give you the chance to forewarn them that the tenant referencing agency will also contact them.

If any of the details provided by the landlord conflict with what you have submitted then this will also slow the process down, so make sure there is consistency across the board.

The best tenant referencing companies have years of experience and have perfected the tenant checking process to make it as smooth and efficient as possible. So make their lives easier by providing the information they request from you as soon as possible, then sit back, relax, and let them handle the rest.

If you are unsure about whether you can pass the tenant checks then find out about getting a guarantor here.

Tenant referencing costs can vary quite significantly depending on a number of factors – because of this, you could be expected to pay anywhere from £15 to £100 depending on your exact circumstances. Before we go into detail about the payment process for tenant referencing, the differences between landlords and letting agents, and how tenants ultimately pay for their background checks, let’s take a moment to understand what tenant referencing is and why you will have to pass a reference check to secure a new property.

The vast majority of landlords and letting agents will perform a background check on potential tenants before they commit to renting out their property. Tenant referencing is an essential part of the rental application process and renters will usually need to successfully pass at least a minimal vetting check before they can move into a property.

A tenant referencing check will usually include a credit check, affordability calculations, employer reference, past landlord reference and identity verification. But different referencing providers and agencies will use different variations of the standard check and may include additional extras to thoroughly vet potential tenants.

If you are renting from a private landlord, they will usually charge you a “referencing fee” which will cover the cost of the professional checks from the third party referencing agency, and perhaps leave a little extra to cover the landlords time spent dealing with the rental application. If, however, you are renting a property from a letting agent, the tenant referencing costs will usually be included as part of a general “admin fee” that covers all elements of the application process.

As mentioned above, letting agents will charge tenants an “admin fee” when they are applying for a rental property. This admin fee will usually cover the tenant referencing costs, creation of the tenancy contract, ID verification, inventory checks and the agent’s time spent sorting out paperwork and coordinating the various parts of the process.

Average letting agent fees for tenants have risen significantly over the past 10 years and research from Citizens Advice Bureau currently places the average admin fee at around £300 per tenant (you can view the full research from Citizens Advice in their report ‘Still Let Down’ here). Your letting agent should always be able to tell you the cost of each individual fee including VAT and explain exactly what each charge/fee covers. A recent Advertising Standards Authority (ASA) ruling means that letting agents must not mislead consumers when publicising fees and tenants can complain to the ASA if fees are not represented accurately.

Letting agents have been criticised for charging extortionate admin fees to tenants, which is why many renters are now actively seeking out private landlords to avoid pricey agency fees. Private landlord does not normally charge general ‘admin fees’ and instead will only charge the tenant for the cost of tenant referencing via an intermediary referencing agency. This means that renting from a private landlord can be hundreds of pounds cheaper than renting from a letting agent.

The costs of tenant referencing checks can vary significantly depending on the referencing company being used to carry out the checks and the level of detail included in the reference report.

For a simple tenant credit check, the fee can be anywhere from £5 – £20. All of the UK’s leading credit reference agencies offer a tenant check service where they will perform a credit check on the potential tenant and return a short report to the landlord or letting agent giving a recommendation on whether the tenant is suitable for the property in question.

Some of the main credit report companies in the UK are:

• Experian
• Equifax
• Call Credit

If your landlord or letting agent wants a more detailed assessment of your suitability for a property, they will employ a specialist tenant referencing agency who will perform not just a credit check, but also employer references, previous landlord references, affordability calculations and more. Tenant referencing agencies will charge anywhere from £15 – £90 for a professional tenant reference check, depending on the level of detail involved and how complex the tenant background checks are.

The above fees are the amount that your landlord or letting agent will pay for the reference checks, but they may charge the tenant more than this to cover the cost of their time spent dealing with the application.

If you are a tenant applying for a rental property, you should expect to pay anywhere from £20 – £50 for your referencing and background checks. The exact fee will depend on which referencing agency supplier your landlord or letting agent is using, but if you are asked to pay well above £50, you should consider challenging the fee and asking them to justify the high price before stumping up the cash.

You should also bear in mind that there could be additional referencing costs if you need to use a guarantor to secure a property.

If you know that you will need a guarantor to rent the property, or if your solo reference report comes back saying you will need a guarantor to secure the property – you will normally be expected to pay for your guarantor’s reference as well.

Sometimes the guarantor will be asked to pay for the referencing directly. In this case, it is up to the tenant to liaise with the guarantor and decide if they want to refund the cost of the guarantor’s reference checks.

Private landlords and letting agents want to be sure that their prospective tenants are not only able to pay their rent but are also suitable to live at their property. They do this by requesting a tenant reference from their prospective tenants, which is similar to submitting references when applying for a new job and shouldn’t be a cause of concern for the potential tenant.

The tenant referencing process is a series of checks into the tenants’ background, requested by either the landlord or letting agent, which is usually done by a tenant referencing agency. These checks will involve the tenant providing some of their personal information, such as bank details, proof of address and identity, their current employer’s details and a reference from their previous landlord.

All professional private landlords should request a tenant reference when renting out their properties to new tenants. By carrying out tenant checks, the private landlord shows that they are interested in maintaining their property and have a professional approach to managing their tenants.

Often letting agents will arrange for tenant referencing on behalf of the landlord. This can be done by contacting the tenants employer and previous landlord directly or using an external tenant referencing company, which is the common method used by letting agents.

Tenants using a letting agent should prepare themselves to pay an administration fee for them to carry out the check which they must consent to. Letting agents will usually retain the tenants fees even if they fail the reference and they will also charge for general admin costs.

It is best to be honest when filling out the details of your tenant reference, as the letting agent or private landlord will not agree to let out their property to you if they feel you are untrustworthy.

To find out how you can avoid failing your tenant reference click here.

If for whatever reason you fail one or more of the above checks, then you do have the option to submit a guarantor to enable you to continue with the process of renting a new home. The guarantor will be legally and financially liable to keep your contract with the landlord, should you fail to pay the rent at any time during your tenancy.

If you still cannot pass the referencing checks for a specific property, even with a guarantor to support your application, it is a good idea to cut your losses and move on. There are plenty of rental properties available on the market, and you can use websites like our own to easily search for similar properties to rent in your area in a matter of minutes. You may find that if you target private landlord properties, the landlord may be willing to negotiate with you and forgo traditional referencing checks in favour of an up-front payment, so you will still have other options even if you fail a reference check.