Tenant checks 'not an optional extra'
Posted by Lucy Wooldridge
Incorporating background checks before agreeing to let a list property to a tenant is essential for landlords, the National Landlords Association (NLA) has said.
Carrying out tenant referencing can help landlords uncover useful indicators of a tenant's ability to keep up with rent payments, such as their credit rating, employment status and any County Court Judgments (CCJs) against them.
A recent survey by the NLA revealed that nearly three-quarters of landlords who sought possession of their property experienced rent arrears, demonstrating the importance of carrying out such checks.
The organisation's own background checks revealed that approximately one in twenty tenants processed had one or more CCJs against them at an undisclosed previous address during the first half of 2011.
David Salusbury, chairman of the NLA, said all landlords should ask for tenant referencing alongside other property management services.
"Getting a proper background check done on all tenants before they move into a property is one of the most important things a landlord can do before handing over the keys," he said.
"It is vital landlords find out basic information about their prospective tenant to help avoid rent arrears or other problems further down the track. This gives the landlord peace of mind that their properties are in good hands and will hopefully mark the start of a satisfactory and hassle-free tenancy."
Tenant referencing could become increasingly important as rising demand continues to push up rents across the vast majority of the UK, meaning it could become harder for tenants to keep up with payments.
A recent survey of its members by the Association of Residential Letting Agents found that 60 per cent have seen an increase in achievable rent levels on residential property in the last six months while buy-to-let has outperformed other investment classes consistently for the past two years.
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