1-in-5 London Tenants Fail Reference Checks

Published 06th Sep 2011

Rising numbers of tenants in London are failing to pass their reference checks because they do not meet the salary requirements being demanded as rents soar.

Instead, they are having to use guarantors who do pass the checks or put down up to a year's rent.

Most credit referencing companies now insist that a prospective tenant earns around 30 times the monthly rent, or two-and-a-half to three times the annual rent. A tenant's savings are not taken into account.

Rents have risen by as much as 20% in parts of London, according to agents Ludlow Thompson.

Lynn Hilton, partner for residential lettings at Cluttons agents, said that one in five tenants is now failing a credit referencing test. Four years ago, fewer than one in 20 failed.

Of those who fail, around half are opting to fork out a bigger deposit instead - up to a year's rent upfront - or produce a rent guarantor whose financial ability satisfies the referencing firm.

The problem of tenants failing the checks is even catching wealthier individuals because, for example, they do not have assets listed in this country for tax reasons, or while they have savings, they do not have jobs.

Source: ' UK Property News '

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