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Graham Awards


Agents fail to conduct robust financial checks on tenants - claim

Letting agents have been accused of failing to carry out sufficient financial checks on prospective tenants. 


Tenant referencing and insurance operator Landlord Secure claims only 22 per cent of prospective renters were required to provide proof of sufficient funds in accounts linked to their rent; just 35 per cent were asked to provide evidence that they had an active bank account at all; some 52 per cent were asked to provide proof of ID.



The firm claims only 29 per cent of would-be tenants were asked to confirm they were in employment during the application process, while only a quarter had to provide a reference from a previous landlord to prove they paid rent on time.

“There is a misconception among landlords who rely on letting agents to carry out checks on tenants that the information they are getting gives an accurate and up-to-date reflection of a new tenant’s financial background” says a spokesman for the firm.

“The reality, however, is that agents rely far too heavily on information that is publicly available, like if an applicant has been subject to a county court judgement or been declared bankrupt. But this will not provide an accurate picture of an applicant’s current financial situation and more robust credit checks need to be made to give landlords the data they need to make informed decisions” he adds.

The survey involved 1,000 tenants and 1,000 landlords in the UK.

  • jeremy clarke

    Oh well, it'll be fine when agents cannot charge a fee because they have neither time or staff to do such checks, at least each tenancy will be founded on the same thin ice!
    You reap what you sow!

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    Well Jeremy...

    The first thought that came to my mind was why, having probably been paid by both the landlord and the tenant to carry out these checks, have they not been doing what they've been paid to do?

    Maybe both landlords and tenants should be requesting a refund from the Agents for taking money under false pretenses!!

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    Any "credit checks" by an agent or reference agency can only access publicly available data from the credit agencies like equifax, therefore any financial check is heavily reliant on a manual subjective process.

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    Credit checks will always be subjective depending on which credit refrencing agency the company taking the references uses, a potential tenant could have a CCJ or IVA regestered with one agency eg Equifax , but that may not show up if they use experion it really does depend which credit agency the debtor uses this in itself creates a lottery so any information obtained on a potential tenant may be wholey inaccurate, there is no central regester of bad debt in the UK....!!

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    Currently, you can only access publicly available data once a CCJ or bankruptcy order is registered it is shared with all agencies.

    It is only subjective as current references cannot see a full credit report i.e. what credit agreements an individual has, amounts, payment/default history etc. which would allow an objective view of an individuals financial conmmitments!

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    We always ask to see 3 most recent months worth of Bank Statements and have done since trading began 18 years ago. It gives us a much better insight into where money is going. It enables us to ask further in depth questions if we have cause for concern on affordability. It has been the sole reason that has given us cause for concern in the past where referencing Agencies would not have necessarily picked things up.


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