Tenant Referencing Checks for Landlords

What is tenant referencing ?

Tenant referencing is a series of checks that help you build a snapshot of your prospective tenant, looking at their financial stability, whether they can comfortably afford the rent and associated costs of your property and their renting history.

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Even if you have already met your tenant and feel comfortable with them as a person, it can be impossible to know this information without detailed checks, so referencing is a vital link in the letting chain and can help build a real layer of security as you start the process.

How does tenant referencing work?

Here at Mashroom, we like to keep things simple. Letting can be complicated, so we don’t think referencing should be! When we reference a tenant, we send them a referencing request digitally, which includes all the details that they need to supply – things such as :

  • bank statements
  • previous landlord contact details
  • employment details etc.

They then gather the information and submit it digitally, where our third-party referencing agency (one of the UK’s largest) processes their submissions and produces a complete referencing report. This will state whether they have passed or failed referencing, and if they have not passed, will provide some detail as to why. We can then discuss this with you, and help you decided how you want to proceed. 

What does a reference check include?

You’re handing over the keys to a significant asset, you should feel confident that the person moving in is well-equipped to not only afford the rent but will love it as much as you do. Our referencing checks include a credit check, affordability check, employment verification and previous renting history. 

What happens if the tenant fails a referencing check?

There are many reasons a tenant can fail a reference check, and it doesn’t always have to signal the end for a prospective let. 

The main reasons a tenant might fail a check are:

Affordability: The household income (single income or joint in the case of a multiple tenancy) must be at least 2.5 times the monthly rental amount. If the rent is £1,000 a month, the household income must be at least £2,500 to pass affordability checks. This is so that they can continue to fund bills and costs, without falling into financial trouble and potentially defaulting on their rent. 

Considerations: If a tenant falls just below the affordability level but can provide proof of significant savings you could consider that this is less of a concern. 

Credit history: If a tenant has CCJs, undischarged bankruptcies, they are unlikely to pass a credit check. 

Considerations: If there are lots of credit concerns, this could be a red flag, however one indiscretion could be worth thinking hard about. A conversation with the tenant about what led to this point, and a holistic look at their financial situation now may ease concerns, and you could request a guarantor to add a further layer of security. 

Rental history: If your tenant is unable to provide a previous landlord reference, they may fail on this section.

Considerations: If your tenant has never rented before (first move from home, for example) it is understandable – mitigate this risk with a Mum and Dad guarantor. However, if your tenant has rented before but is unwilling to provide a reference, alarm bells may start to ring… why are they not happy for you to know how their last rental experience went? In this instance, it may be wiser to move on. 

It is always up to you as the landlord to decide whether you proceed with a tenant. If you have met them and feel that they would be perfect for your property, or the referencing hiccup is easily explained, you may decide to proceed with the tenancy agreement despite the fail. However, never feel you have any obligation to do so, and if you have a strong feeling either way, go with it. 

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Do I have to reference a guarantor?

Yes, if you are going to engage a guarantor, they should also be referenced. The process is exactly the same, although clearly their previous rental history is of less concern to you!

For guarantor references, you are primarily concerned about their affordability and credit worthiness. They are there to act as a financial safety net for your tenants, so you need to be sure that they are financially secure themselves, should worst come to worst. 

How long does a reference check take?

The time a reference check takes is very dependent on the level of detail that it is going into, and how respondent everyone involved in the process is. In most cases, reference checks will require a previous landlord feedback (one of the most helpful elements)! We all know how busy landlord life can get, so this can sometimes take a little while to feed back.

Many referencing checks also require proof of employment, sometimes in the form of a letter or email from a manager or HR. Usually, this is a fairly speedy process, but if your prospective tenant works for a large organisation, it can take a little longer as the process is often quite formal. Here at Mashroom, our referencing record is a turnaround of two hours but the process takes a couple of days on average – we think it’s worth the wait though, referencing is so important, it’s vital all the correct details are in place. 

Is a reference check a legal requirement?

Tenant referencing isn’t a legal requirement however, it is the best way to enter into a rental agreement with your eyes fully open. Additionally, it is also a requirement for many insurances. You are unlikely to be able to secure rent guarantee insurance without providing a referencing certificate to prove your tenant has been successfully referenced, for example. Once you have a clear reference in place, you can protect your rent with some really effective rent guarantee insurances, so it’s well worth getting this first brick in the wall! 

Who pays for tenant referencing?

Landlords are responsible for paying for referencing. As part of the changes bought in by the Tenant Fees Act in 2019, changes were made that made it illegal for tenants to be charged for costs such as referencing. The bill has strived to make the rental process a fairer process, and a lot of work has been done to ensure that the costs associated to starting a tenancy remain cost-effective for landlords. 

Here at Mashroom we appreciate that landlords have lots of costs to bear, but want to make sure that referencing isn’t skipped, as it is such a vital safety check for landlords. That’s why we’ve worked hard to make it as cost-effective and simple as possible. A full tenant reference, including credit checks, affordability, employment checks and previous landlord references is only £15, and you don’t have to do a thing! Find out more about our Tenant Referencing service.

Should I reference all of my tenants?

All tenants who are named on the tenancy agreement should be referenced, whether they are contributing financially to the rent or not. The referencing check is not just about whether your tenant can afford the rent, it is also about their suitability to live in your property, so make sure you have a clear picture of everyone who is going to be living there. 


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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, register.fca.org.uk or by contacting the FCA on 0800 111 6768

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