Must-have tenancy references and checks guide

It’s a legal requirement to carry out right-to-rent checks on all tenants. And carrying out other tenant background checks significantly increases your chances of finding a good tenant who will take care of your property. Here’s everything you need to know.

Why are tenant references and other checks important?

Carrying out appropriate reference checks helps you find tenants that are reliable and trustworthy. It’s not about being judgemental or accusatory. It’s just a matter of laying the groundwork so that you can find good tenants who are likely to treat your property well and who can stay on top of their rental payments.

Not only will good tenants take care of your property, they’ll be more likely to let you know about any maintenance requirements – so you can get things sorted promptly. All-in-all, finding reliable tenants is one of the best ways to protect your investment, and keep the wheels of your Buy to Let business running smoothly.

Of course, no preliminary check will ever give you absolute certainty of picking the right tenant. But screening prospective renters gives you a much better chance of finding a good fit.

💡Tip: to see our guide about finding and choosing tenants, head here >

What kind of references and checks should landlords carry out?

There are a range of checks you can carry out to assess how reliable a tenant might be. Some landlords choose to do these themselves, while others hire a letting agency or referencing company to take care of things.

Essential checks

Carrying out a right-to-rent check is a legal requirement, and some basic financial checks are essential when it comes to safeguarding your rental income.

Right to rent

You must check any tenant’s right to rent legally in England before starting a new tenancy with them. If it’s discovered you’re renting a property to someone who’s not allowed to live in the UK, you could face a fine of up to £3k per tenant or even a prison sentence.

It’s important to note that you have to check all new tenants – it’s against the law to discriminate by only checking people you think aren’t British citizens.

To carry out this check:

Determine who will be using the property as their main home – so, the official tenants (adults only);
Ask them to show you their original documents that prove they have the right to live in the UK;
Make copies of these documents.

There’s more information about carrying out right-to-rent checks on the UK government’s website >

Credit checks

Carrying out a credit check on a potential tenant gives you an idea of how they’ve been able to stay on top of their financial obligations in the past. You need to get their permission before doing this.

There are lots of different companies you can use to carry out a credit check – a quick internet search will throw up plenty of options. When carrying out a tenant credit check, things to look out for are:

Whether the person has a history of missed payments (a couple of missed payments might not be cause for concern – but a repeated pattern of missing payments could be a red flag);
Whether they’ve taken out an Individual Voluntary Arrangement (IVA) before – this is an arrangement with creditors to pay back debt and is typically taken out by those who’ve been struggling to pay what they owe;
If they’ve made payments to debt collection agencies before.

A credit check will also highlight if a person has any County Court Judgements against them.

All of this information should help you build up a picture of a potential tenant’s reliability when it comes to paying their rent on time.

Bank statements

You can ask to see a potential tenant’s bank statements to double-check their income and general financial situation. This can help confirm that their actual level of income corresponds to what they declared. And it can give you an idea of whether their financial situation is in line with the affordability of the rent required for the property. It’s usual for landlords to ask to see bank statements dating back three to six months.

Optional checks

Carrying out some additional checks can help you feel more secure in your choice of tenants – but it’s worth considering that this might lengthen the referencing process👇.

Employer references

Asking for a reference from an employer can give you extra peace of mind that your tenant does work where they say they do and has a stable source of income. This can be as simple as having a quick call with their employer, or exchanging an email with them.

Past landlord references

You might find it reassuring to ask potential tenants for a past landlord reference. This can give you a better idea of what type of tenant you can expect them to be. A past landlord will also be able to let you know what state their property was left in at the end of the tenancy.

How long does tenant referencing usually take?

Once you’ve received all the appropriate documentation and permission from a potential tenant, you should be able to get the referencing process wrapped up within a couple of days.

Hammock gives you real-time monitoring of rental payments

Once the tenancy starts, Hammock will help you stay on top of all payments, made and received. You’ll receive real-time notifications for all rental payments received, per property and per tenancy, and alerts for any late or missing payments.

Try Hammock for free for 30 days