Is there any income to rent ratio you look to for affordability?

by Readers Question

10:38 AM, 17th July 2020
About 6 months ago

Is there any income to rent ratio you look to for affordability?

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Is there any income to rent ratio you look to for affordability?

Hi All, We have our flat advertised for tenancy and we got a couple who are interested to move in. We asked for all the relevant info for the reference check from TenantVerify, but also asked for last 6 months bank statement/payslips, which they happily provided with no delay.

One partner has just started working after Uni in Dec 2019. The other partner has been in employment since Feb 2019.

The total household income is 40k gross. They were previously living in a shared accommodation paying £450 each, totalling  £900 so moving to our flat which is for £750 made sense for them. Rent payments for the last 6 months were on time as I could see on the bank statement.

The only concern I had is affordability, they both have a bank loan. Their balance is showing in (-) must be due to bank loan which they did make it clear in the Tenant Verification form. I have not yet submitted the reference check as I noticed this affordability issue. They have provided rent guarantor on the papers, not sure what the relation is so far, but can ask and get them for verification too if required.

Is there any income to rent ratio you look to for affordability?

Any advice here what we should do.


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10:59 AM, 18th July 2020
About 6 months ago

If they are paying a student loan the income must be higher than the threshold which is quite high. The guarantor must be checked and sign a proper agreement fully understanding that if the tenants default they will have to pay. Even though you have found your tenant I would engage an agent to deal with the legalities as you don't sound as though you have much experience and you could fall foul of all the legislation which could cause you big problems down the road.

Jonathan Clarke

15:06 PM, 19th July 2020
About 6 months ago

As a guide their annual gross should be around 2.5 the rental pa
But there are many variables this is just a guide so check out their loans / prospects / family support etc
For instance if they have strong family support that`s a good sign. Have they people in their lives who wont let them fail even though they are not necessarily signed up as guarantor

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