What level of income do tenants need to prove they have to pass referencing. IE is it 2x, 3x or 4x the monthly rent?
Most often, 3 or 3.5 times is used
Thanks Steve, I really appreciate that.
Would you mind answering another question? I have one applicant who is asking to pay part through disability payment from the DWP - direct to the bank account. How would their referencing work?
I really appreciate your time, thanks Steve.
I am not sure. I suppose look at what is their total income and see if that passes affordability checks. Be aware though that claiming benefits can be relatively precarious and if he is sanctioned or gets reassessed then he will not be able to pay. Of course that works with wage earners too in that they can lose their job etc. And get a home owning guarantor.
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Only you can decide if they pass your referencing requirements. People on means tested benefits will normally not pass the standard income multiples.
The local housing allowance has been frozen again today until april 2024 and in virtually all areas is nowhere near market rates, so it is important to ensure they have enough of their own income, along with the disability payment to meet your requirements.
I dont personally use a fixed income multiple as people on higher incomes can afford to spend higher proportion on rent and people on low incomes need to spend higher proportion of income on essentials.
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