Renting a property in the UK comes with several attendant processes and regulations that it is good practice to understand from the point of view of both landlord and tenant. There may be occasions when it becomes attractive to rent part of one’s portfolio out for a selected duration and there may also be examples when it makes financial sense for you to become a tenant, particularly for a short term. There are subtle differences involved when letting or renting for longer periods and one will find that regulations in the longer term are a much more stringent process with added logistics and formal admin required.
Undoubtedly, the team of professionals you choose to help you in either case will be on hand to look after the minutiae in the details, but a top-down understanding of the reasons and terms allows a grounding for any discussions and updates.
Tenant Referencing – A Landlord Perspective
Mitigating Risks
The risk mitigation involved in tenant referencing reduces any negative consequences of non-payment, property damage or legal disputes down the line. A researched and robust reference will encourage the selection of reliable tenants to protect your assets at all times.
Insurance Compliance
Referencing is also often a mandatory part of the Landlord Insurance process. Proof that it was conducted may very well be requested if there are ever rent losses or malicious damages incurred.
Tenant Referencing – The Tenant Perspective
Credibility
A clean and credible reference highlights trustworthiness in the entire process. Importantly, it also distinguishes a prospective tenant for the increasingly competitive markets at play for high-end properties.
Professional Peace of Mind
When asked for a reference, it should reassure the tenant of the landlord's credentials too. It displays an understanding of the service levels expected from all parties during the time of the tenancy.
The Legal Framework
There are three foundational legal aspects that it pays to become familiar with from both sides. Doing so can avoid any misunderstandings or challenges during the tenancy term.
Right to Rent
It is legally required that every adult tenant has the right to rent in the UK. Failure to request and verify this can accrue fines of up to £3000 for every violation. A sound strategy is to request acceptable documents such as passports, driving licences or biometric permits, as all are permissible documents.
Tenant Fees Act of 2019
It is the landlord’s responsibility to bear the cost of referencing. Charging this on to tenants for checks to be carried out is strictly prohibited.
Data Protection & GDPR
Inevitably, referencing will involve the collection of sensitive data. Measures must be taken to collect only what is necessary and store it in a secure data location with limited access. In the rare occasions that one would process this data themselves, then the Information Commissioner’s Office (ICO) should be consulted regarding registration.
Equality Act 2010
All references must be applied equally. Refusing tenants on the protected grounds of race or family status, etc, is considered unlawful.
Tenant Referencing Steps
The essential steps that must be followed can be stated as follows:
1. Initial identity & Right to Rent checks carried out
2. Obtain consent for credit and financial checks and complete them
3. Verify income through employer reference, payslips of SA302 tax information
4. If possible, confirm rent payment history and conduct from previous landlords
5. Check the current & previous address history of the prospective tenant.
Special Considerations
There are certain situations where it may not be possible to satisfy certain criteria using documented information alone. In these cases, a guarantor may be requested to become accountable for rent losses and property damages if they occur.
This scenario is often found when a young adult or student does not have the suitable rental or employment history to support an application. All of the sensible checks can be carried out by the guarantor in their stead for a complete process to be followed.
Comprehensive Conclusions
The art of tenant referencing from both sides of the process is one that works best when all things are considered. For landlords that are operating with a portfolio of prestige properties, it represents much more than simply the legislation and mandatory requirements. It is a reputational concern that can protect your assets and build professional integrity within the elite and closed markets of luxury rentals.
For tenants operating in a similar domain, it encourages their own reputation as a trusted renter that can satisfy their position as a guardian of a property during the time of their tenancy. This duality is keenly felt in the most desirable parts of cities such as London, where the market dictates a discerning approach from both sides.
Refined Rentals in The Capital
UK Sotheby’s International Realty rental services demonstrate how it is possible to find exquisite homes in prime central London that are attuned to a refined lifestyle of both exclusivity and privacy. This marvellous Mayfair property is a great example of how it is possible to experience the thrills and grandeur of the capital on a semi-permanent basis for an extended stay or perhaps while seeking a home purchase.
With all of this information safely stored in your own property armoury, you should be better equipped to approach the next step in successfully renting out or finding your perfect property. Preparation is everything and will often be the most important key of all to unlock the perfect rental journey for everybody concerned.
