Thorough tenant referencing can save you thousands in rent arrears and property damage. Here's how to do it properly and what warning signs to look out for.
The difference between a profitable property investment and a nightmare is often the quality of the tenants in your property. Thorough referencing before every tenancy is the single most effective step any landlord can take to protect their investment.
The referencing process
A comprehensive tenant reference includes the following components:
Identity verification: confirm the tenant is who they say they are. Check their passport, driving licence or other photo ID. Compare the photo to the person in front of you.
Credit check: a soft credit check reveals whether the applicant has any County Court Judgments (CCJs), individual voluntary arrangements (IVAs), bankruptcies or other credit issues. Adverse credit isn't automatically disqualifying, but significant issues should prompt further discussion.
Affordability assessment: tenants should earn at least 2.5-3x the annual rent in gross income. For joint tenancies, combined income is usually assessed. Request payslips (3 months), bank statements (3 months) and an employer reference letter confirming employment status and salary.
Employment reference: contact the employer directly (not just through a letter the tenant provides) to confirm employment status, length of service, salary and whether any disciplinary proceedings are ongoing.
Previous landlord reference: contact previous landlords directly — and be sceptical of references provided by the tenant themselves, which may be fictional. Ask specifically whether rent was paid on time, whether the property was maintained, and whether there were any complaints from neighbours. Ask whether they would rent to the tenant again.
Right to Rent check: verify all adult occupants have the right to rent in the UK. Document the check and keep copies of documents.
Warning signs to look out for
Be cautious if: the applicant rushes to sign and discourages thorough checking, they can't provide an employer who will take a call to confirm details, they've moved frequently (ask why), they have significant unexplained gaps in rental history, or they seem evasive about financial matters.
A tenant who understands why thorough referencing is in everyone's interests will cooperate fully. Reluctance to be referenced is itself a significant warning sign.
Professional referencing services
Various companies provide professional referencing services for landlords, typically charging £15-£30 per applicant. These services provide a structured credit check, employment and previous landlord verification, and an overall recommendation.
Our tenant-find service includes comprehensive referencing as standard. We only proceed with applications that pass our full referencing criteria. Contact us to discuss how we find and vet tenants for landlords across our operating area.