Referencing & Affordability Checks
At a Glance
- Referencing helps landlords decide whether you're a suitable tenant.
- Most landlords will check your identity, income and previous rental history.
- Employers and previous landlords may be contacted for references.
- You may need a guarantor if your income doesn't meet affordability requirements.
- Failing a reference doesn't always mean you can't rent the property.
What is Tenant Referencing?
Tenant referencing is the process landlords and letting agents use to assess whether you’re likely to be a reliable tenant. It usually takes place after you’ve paid a holding deposit but before the tenancy agreement is signed.
The purpose is to verify your identity, confirm your income, assess whether you can afford the rent and review your previous rental history where applicable.
Most landlords use specialist referencing companies to carry out these checks, although some choose to complete them themselves.
What Checks Can a Landlord Carry Out?
A landlord or letting agent may ask for information to help them assess your application, including:
- Proof of identity
- Proof of address
- Employment details
- Proof of income
- Bank statements
- Previous landlord references
- Credit history
- Right to Rent checks (where applicable)
They should only request information that is relevant to assessing your tenancy application and must handle your personal information in accordance with UK data protection law.
How Do Affordability Checks Work?
Many landlords use affordability calculations to determine whether you can comfortably afford the rent.
A common benchmark is that your annual household income should be around 30 to 36 times the monthly rent, although this varies between landlords and referencing providers.
For example:
| Monthly Rent | Typical Income Required |
|---|---|
| £750 | £22,500-£27,000 |
| £1,000 | £30,000-£36,000 |
| £1,250 | £37,500-£45,000 |
| £1,500 | £45,000-£54,000 |
Meeting the affordability threshold doesn’t guarantee you’ll be offered the tenancy, but it can improve your chances.
There is no legal affordability formula. Many landlords and referencing companies use income multiples, but each landlord can decide how they assess affordability provided they do so lawfully and consistently.
What Documents Will I Need?
Most applicants should expect to provide:
- Photographic ID
- Recent payslips
- Bank statements
- Proof of current address
- Employment details
- Previous landlord details (if applicable)
If you’re self-employed, you may instead be asked for recent tax returns, SA302s or accounts prepared by an accountant.
Students or people moving from overseas may be asked for different forms of evidence.
How Long Does Referencing Take?
Most referencing checks are completed within two to five working days, although this can vary depending on:
- how quickly employers respond;
- how soon previous landlords provide references;
- whether a guarantor is required; and
- how quickly you return any requested documents.
Responding promptly can often speed up the process.
Can I Use a Guarantor?
If you don’t meet the affordability requirements or have a limited credit or rental history, a landlord may ask you to provide a guarantor.
A guarantor agrees to take responsibility for your rent if you fail to pay it.
Before agreeing, they should carefully read the guarantor agreement to understand exactly what they’re committing to.
A guarantor is usually expected to:
- pass affordability checks;
- have a good credit history; and
- understand they may become legally responsible if the tenant fails to pay rent or breaches the tenancy agreement.
What if I Fail Referencing?
There are many reasons why someone might not pass a reference check, including:
- Low income
- Poor credit history
- Limited employment history
- No previous landlord reference
- Incorrect information provided during the application
Failing referencing doesn’t always mean you can’t rent the property.
Some landlords may accept:
- A guarantor
- Rent paid in advance (subject to current legal restrictions)
- Additional evidence of income
- Alternative references
Can a Landlord Refuse My Application?
Yes, a landlord can decide not to offer you a tenancy if, for example:
- you don’t meet their affordability requirements;
- referencing identifies significant concerns;
- another applicant is a better fit for the property; or
- you choose not to provide the information needed to complete referencing.
However, landlords must not unlawfully discriminate against applicants because of protected characteristics under the Equality Act 2010, such as disability, race, religion, sex or pregnancy.
They should also avoid blanket policies that unfairly disadvantage certain groups, such as automatically rejecting everyone who receives benefits or has children. Each application should be considered on its own merits.
Renters' Rights Act Update
The Renters’ Rights Act introduced several changes that affect tenants looking for a new home.
Rental Bidding
Landlords and letting agents must not invite or encourage tenants to bid above the advertised rent.
The advertised rent should be the price the property is available for.
Families
Landlords should not operate blanket policies refusing tenants simply because they have children, unless there is a lawful reason for doing so.
Applicants Receiving Benefits
Receiving Universal Credit or Housing Benefit does not automatically prevent someone from renting a property.
Landlords should assess each applicant fairly and consistently based on their individual circumstances.
Although landlords can still carry out affordability and referencing checks, they should avoid blanket policies that unfairly disadvantage particular groups.
Frequently Asked Questions
Can a landlord ask for my bank statements?
Yes.
Landlords or referencing companies may ask for recent bank statements as evidence of your income or regular spending. You can usually redact information that isn’t relevant, provided your income can still be verified.
Can I rent without a guarantor?
Often, yes.
Some landlords won’t require one if your income and references satisfy their affordability checks. Others may ask for a guarantor if you’re a student, have limited credit history or don’t meet their affordability requirements.
Does receiving Universal Credit automatically mean I’ll fail referencing?
No.
Receiving benefits doesn’t automatically prevent you from renting a property. Your overall financial circumstances and the landlord’s assessment will usually be considered.
Key Takeaways
- Referencing is a normal part of renting a property.
- Most landlords check identity, income and rental history.
- Affordability requirements vary between landlords.
- A guarantor may help if you don't meet the required criteria.
- Landlords can refuse applications for legitimate reasons but must not unlawfully discriminate.
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