Are there some agents out there frustrated by the declines they get for some of their tenants, when they seem perfectly fine?
Below are just a few reasons as to why this could be.
Affordability – With rental prices on the increase, the traditional affordability ratio of 2.5x is hampering certain people and they are being declined.
Written Employment references not being returned – In my experience some employers are not always in a position to send back a written reference, number 1 reason? they didn’t get the email sent by your referencing provider and your referencing providers didn’t have the common sense to call the referee and double check the email was sent to the right address.
Landlord reference not returned – believe it or not some landlords cannot be bothered to return the reference in a speedy manor, some probably believe “what do I have to gain from it?” They may well be very busy people too with other concerns.
CCJ has been found – In this economic climate CCJ’s are more and more common, I have seen them range from as little as £15 to £50000.
So there are a few reasons as to why a tenant may fail and they are perfectly good reasons not to pass tenants through referencing. However there are perfectly good ways to overcome these issues. Now don’t get me wrong, we have to have criteria guidelines, but we also have to use our brains in the decision making process. For example:-
A husband and wife are moving into a property, one earns £100,000 the other £10,000. The rental value for this property is £850pcm. So the income would need to be £12,750 per applicant.
So the tenant who earns £10,000 according to the computer fails so needs a guarantor or rent up front. The tenants don’t like this outcome and become frustrated (remember when all is said and done the tenant generally blames the experience of referencing on the agent when they talk to their friends). Well surely the rent is covered by the £100,000 a year tenant? Common sense tells us that they are not going to be splitting the rent 50:50.
If your referencing company does stick to the “computer says no” approach why not split the rent using a different ratio maybe 80:20 (in favour of the higher earner obviously!!)
Another example would be a landlord not returning a reference due to the hassle of printing out the email, signing it, finding a scanner and sending it back.
So how do you tackle this one?
Allow them to respond via email using a quick and easy online form and run a land registry check on the Landlord to confirm it is them that owns the property. You can also have a look at the tenants bank statements, look for regular rental payments going out each month, are they always on the same day and are they the same amount?
Now these are just a couple of examples, I could list hundreds more, but I am hoping I have made my point.
So to summarise
Your referencing company may well be governed by the insurance, not the other way around.
If your referencing company are as a good as they say they are surely their insurance side of the business will back them in the decision making and trust their judgement?
Not all tenants can meet the standard referencing criteria set by insurance companies but does this mean they won’t pay the rent? Possibly, but I would place a bet amongst the ones that do meet the criteria some of them will also not pay the rent!!
Don’t let perfectly good tenants go without a home because the “COMPUTER SAYS NO!!”