I’ve been reading some of the threads on the landlords section and have seen that a lot of landlords have negative experience with CCJs. As such, I understand why landlords are so against tenants with CCJs.
However, I wondered if I could get some advice about my circumstances.
5.5 years ago, I lost my job (2 months before my first child was born). As I was already in the process of starting my own business, I found I was unable to get jobseekers/universal credit and had a very limited amount of money in the bank.
I decided to throw myself in to building up my own business and always made sure I paid my mortgage, and have paid my mortgage every month without fail. As I prioritised my mortgage over everything else, I ended up with 4 CCJs and my wife has 2. These have now been satisfied but only recently.
We have decided to sell our house and want to rent for a few years, but are really struggling to find someone that will accept us due to our CCJs.
My wife and I are now company directors on a combined income of £70k and we are in a position to pay 6 months upfront.
I just wondered if I could get some advice on the best way to approach our circumstances with a prospective landlord. I feel like a platform like Openrent is much better as a lot of letting agents will actively discourage landlords from even considering someone with CCJs
I’ve been honest with every landlord we have approached so far (and would not consider doing otherwise) but still being hit with a hard ‘no’.
It doesn’t help that for every rental in my area there are 5-10 people applying, so we are probably way down the list of what landlords will consider ‘safe’.
The fact that you are self employed compounds the risk. An attachment of earnings order is not an option for the landlord if you get into further financial difficulties.
I would definitely consider you, but many others wouldn’t. Where and what are you looking for?
Tbh, I would just stick with your current property or buy somewhere else iiwy.
I’m technically not self employed as we are both company directors (we are also paid on PAYE).
Looking for 3 bed in Lancashire.
Yeah if we don’t manage to find a suitable rental with a landlord that’ll accept us, we will have no option to be stay in our current house, we just would like to make the most of the current market but I get that’s not always going to be possible.
The rental market is probably worse than its been in decades. A series of Govt measures intended to protect tenants has ended up making it practically impossible for anyone outside a narrow band of risk factors to get a tenancy.
I presume you earn £8-12k though and take the rest in dividends (if you are being tax efficient). I’ll guessing most landlords will understand that even less than being genuinely self employed!
Having said that, I don’t get why the self employed are considered more risky. I am ‘self employed’ (limited co) too. If I lose a client, I still have 50+ left, so still have most of my income. If an employee losses their one ‘client’ (ie job), that’s all of their income gone.
At present 100% of my pay is through PAYE rather than paid via dividends as I’m not a huge fan of tax loopholes and the total isn’t much different when taking into account corporation tax, etc.
However, even if a prospective landlord asked to see my company accounts, or something similar, I wouldn’t necessarily have an issue with that. My company is on target to turnover £600k this year and our sales have doubled every year we’ve been trading but yes, as you say, lose one customer and we have many more to replace them, and obtaining new customers almost weekly.
Paying yourself a basic salary (lower earnings limit/tax threshold depending on circumstances) and then dividends isn’t a loophole, is legitimate tax planning. I suspect HMRC find it more suspicious when director/shareholders don’t do it!
I am a landlord - so look at things from a landlord perspective. I have rented a few of my properties out to tenants with CCJ’s. Each time the applicant was upfront about the fact that the had CCJ’s. They explained how and why they came about etc. These tenants usually always fail the referencing.
From my perspective as a landlord - when a tenant explains their situation and provides proof that they can meet the rent and have enough left to live on (I believe the income should be three times the rental amount) provide a character reference, I would be more than happy to rent my property to that person.
On the other hand, if I go through the referencing process and CCJ’s appear without prior knowledge - I will not be very happy and would think twice about the applicant.
At the end of the day, both landlord and tenant need to be happy and comfortable with one another and I think honesty is always the best policy. (Well - even our Prime Minister has had a CCJ!!!) haha
I wish you the best of luck in finding a property and congratulations on building yourself a business.
I have just taken on tenants where the female in the partnership had a CCJ as a legacy from her previous marriage. Before referencing and credit checks her male partner informed me that there may be an issue from the past that would show up on his fiance’s credit check. She said she wasn’t sure.
The CCJ came up on her report and we had a face to face discussion about it where it was revealed that her ex-husband had run up some debt and then refused to clear it after their split. I asked for 3 months of bank statements from each of them and was satisfied they had more than enough income with their other outgoings taken into account to proceed particularly as their other references were good (previous Landlord and employer ).
So I guess it’s up to individual Landlords to assess the risk, build in an early termination clause to their contract and monitor the progress. Btw I would not trust an up front payment of 6 months rent to obviate those circumstances as that can be used to secure the tenancy beyond the 6 month early termination clause but may be frought with problems later.
When i recently referenced my new tenants one of them showed up as having a CCJ. I asked him directly about it and he explained his circumstances at a time that resulted in him being unaware he owed extra rent money on the shared house. He was a student at a time. I made a judgment based on his current situation and my gut instinct as well and we proceeded with a contract .
I think if you are updfront and explain your position clearly whilst focusing on current situation you are in you may find a landlord who will accept you. Also consider personal references from past collegues/employers - give out telephone numbers for informal chats not just email . Good luck
I find it difficult to understand why you would want to sell and rent if you are financially secure with a good business. Housing remains the best investment long term and right now we are on the upward curve with a reset some way off with inflation coming. You are on the ladder and it only gets easier over time. Wait out your CCJ’s to clear off and then either invest or move up. Sell to rent will hurt long term as the value of your cash will decrease due to inflation and the cost of living increase at the same time as rent will be higher than mortgage.
Hi do you have any properties in Wellington. I’m recently divorced. I am looking to. Get out of shared accommodation. I work for the NHS and have done so for 32 years. I can provide references.
Regards skeeter
