Let me give you a working example:
1 bed flat in my area goes for around £1650. Housing benefit covers up to £1350 so there is a shortfall here. My total income from UC and Pip is £1500. My council tax bill is 0 which helps lower overall housing costs. I also have 5k of savings for any emergency.
I can obviously easily afford the monthly top up but I am not sure how referencing agencies judge affordability. Would I qualify for this flat? I need to find a flat within the next 45 days and am getting very anxious here.
The general rule LLs use to calculate this is that rent is less than 2.5 x income (some LLs are stricter and use 3x). For your example, that would mean they’d be looking at applicants who have a minimum income of around £4,125.
Your housing benefit would be taken into account which would give you a monthly income of 1,500 + £1350 = £2,850. Your savings are a good indicator that you are sensible with your money and would count towards showing you are a tenant worth having. But your income falls quite a way short of being able to afford that flat.
As a comparison, in the northeast of England, you can rent a nice 3 bed house with a garden in a decent area for less than that flat costs a month. Apart from a much more affordable lifestyle, there’s a lot else going for the northeast in particular but I’ll not bore everyone here with how great it is. 
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@Archetype think the referencing agencies don’t publish their formulae - otherwise people would try to game it. You say ‘I can obviously..’. Increasingly openbanking is used to confirm not just income but outgoings.
If you can supply a guarantor who meets the affordability criteria (usually 3x) then even if you don’t a LL can then get RGi so more likely to accept you.
In terms of having only 45 days if you are worried about potentially becoming homeless get advice from Shelter
Good luck
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I don’t think that’s the case in my part of the country. Here, if you’re working, they expect your income to be around 30 times the monthly rent. So if the rent is £1,650, you would need to earn about £49,500 per year to qualify. There is no way I need to be making 4k+ (net). None of the estate agents that I know of require this amount of monthly income for working people. I got my current flat that has a rent of £1450 when I was working and I was making around £3,100 back then.
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£1,650 x 30 is £49,500 income per year (your calculation).
£4,125 x 12 is £49,500 income per year (my calculation).
They’re just two different ways of saying the same thing: that you don’t meet the affordability criteria for that flat.
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Yes that’s right. My bad.
I would basically need someone to join me who can cover the monthly shortfall of around £1300. Right?
Unfortunately, there’s an issue with that too. When you let a property with someone else who isn’t family, you are “jointly and severally liable” for the rent. In other words, the LL has to consider you both separately in terms of affordability just in case one or the other of you loses your job or has an issue with benefits or stops paying or simply does a runner. In that case, the remaining tenant is responsible for the entire rent, not just their share. The LL has to mitigate against this risk. This is particularly the case in your situation because you’d effectively be finding someone precisely because you can’t afford it on your own.
Affordability isn’t a black and white thing for every LL, particularly if you can show you’ve already got a track record of making rent payments for similar amounts previously and have good financial records (such as your savings). Also, if you have a guarantor who has their own home, then you have someone who will pay rent if you are unable to. That’s essential for a LL to get rent guarantee insurance too, by the way. So, some LLs would consider you on this basis and be less strict about the mathematics. Others will simply do the maths immediately and not give you a response. That’s just the way it is.
One good way to see if you have a chance is to visit letting agents and present your financials and see if they can give you an idea of whether you can afford something in the area you want to live in. If they won’t take you on their books, then that will show you right away the reality you might be facing.
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@Archetype the affordability ‘rules’ are all just guides - they are based on gross not net income. Some agents and LLs will certainly take account of savings when assessing affordability. Less clear that the automated referencing reports using openbanking do the same but they do look at both income and outgoings do more likely to be able to assess if you can afford.
Your income is 2850. If a LL or automated report uses 40% of gross then you can afford 1140. If 1 bed flats in your area cost 1650 you can look in a cheaper area nearby, look for a studio or look for a houseshare or a lodger arrangement. Sites like spareroom might help. Some LLs will have individual contracts per tenant esp if an HMO.
Ps not sure what area you are looking at. Searching on rightmove today 1 bed flats within 1/2 mile of crystal palace se19 in London - which is a pretty desirable location -start from around 1200pcm though probably v small and actually in se19 youll be more likely to pay 1400-1500 plus. To find a 1bed for 1150 you’d need to look a bit farther out probably Croydon
Pps I’d also double check what the LLA is, using https://lha-direct.voa.gov.uk/ - not sure where would pay as much as 1350 its def not as much as that in my bit of london
Ppps with the Renters Rights Act there are no more s21 no fault eviction and rent arrears have to be 3 months not 2 before a tenant can be evicted on those grounds and it takes longer. So LLs are going to be tightening their criteria which is good if you have a long history of paying rent on time but may make it harder re affordability to find someone who’ll rent to you with rent at nearly half your income as you managed in the past
Tatemono comments above are spot on
Speak to agents but remember affordability is just one criterion. Your reference is number one and how you present is another.
I dont envy you as so many landlords are selling up now. Its a landslide where i am. Its not a high rent area like london and fines are often absolute rather than based on multiples of rent. Judges like to award heavy penalties for even small or inadvertent infractions.
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I am quite specific about where I need to live, as I need to be close to my elder parents and hospital due to a disability that requires ongoing care. No chance i’ll ever consider dodgy Croydon.
I have held a tenancy for six years without missing or delaying a single rent payment. My current rent is £1,450 which would have been more had it been a new contract. I am looking to move due to the need for more space, as well as significant noise issues caused by the tenants upstairs which am sick of among other nuisance related issues. I would imagine that my referencing will be viewed favourably (though not sure how much this is going to help). I am a great quite tenant who never causes any issues. I rarely even have any guests. With that said to prove this is another matter and I fear homelessness or that not desirable accommodation will soon be upon me.
Has your Landlord issued a section 21? What are the details of your having to leave your current tenancy?
@Archetype
Being specific is fine so long as you can afford the rent in the area you are looking. From what you’ve said so far you can’t. So you have to look elsewhere or houseshare or reduce your expectations in other ways eg a studio not a 1bed. Rents have certainly gone up in 6 years and you may have to compromise somewhere in what you want vs what you can find and afford
As for Croydon being “dodgy” - there are parts which are and other parts which aren’t - it’s a large borough. Whether there or elsewhere there are local crime etc maps
Good luck
you would be better off in cousil or housing association property. This is due to my experience with poor private rented properties