Anyone knows how affordability is calculated during referencing? Thanks
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I have these on a document, from the company who Openrent use for referencing. Unsure if its changed.
Rent x 12 months x 100 divided by 35 = Salary (Tenant)
Rent x 12 months x 100 divided by 25 = Salary (Guarantor)
35-40 times monthly rent ie £1000pcm needs to earn £35k and a guarantor is the same +£6k
It’ll depend on what the LL wants as a safety buffer.
In terms of calculating, I use 3 x pcm rent because most of my applicants are more familiar with their monthly income than annual figures.
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Outgoings are equally as important as income. If more is being paid out each month than coming in , that’s not good.