I’m self employed and have just returned to the UK after several years abroad. Thus I have no proof other than bank statements showing income. Also I have no guarantor. I just contacted a landlord on here and after merely stating I was ‘self employed’ he said I wouldn’t pass referencing. I didn’t realise it was as severe as that. He also said six month’s rent would not be acceptable but I’ve no idea why since that seems the least risky of all since you have all you were worried about not receiving ie the rent.
I was able to rent places in the UK about 10 years back by simply paying 5-6 months rent in advance even with estate agents, never mind private landlords. The UK seems to have changed a lot.
There are paid for guarantor services available. This may help you out, I can’t really recommend any though I know they exist.
Its what happens after the 6 months will be the LL concern.
No UK trading history to show income is looked at as high risk, understandably. Unless in the unlikely event your business income isn’t effected by location?
Pay six months again? Most contracts seem to be for 6 months anyway so if you sign a six month contract I don’t see how there could be any concern at all. Especially if I’ve proven my income with 6 months of bank statements too.
It’s an online business so no it’s not affected by location at all.
Yeah that is a legitimate concern…although surely less concerning than paying just one month and then no more?
Not really, as it can take a year to get someone out and its usually not worth suing a self employed tenant for arrears as there is no option for an attachment of earnings order.
As a landlord, if someone showed me income for several months that was based on a reputable stable online business, with 6 months rent in advance, I would certainly see this as a reasonably strong applicant. Credit check systems are more of a “computer says no” scenario, where discretion is unfortunately removed from the equation. Also a LL cannot credit check an applicants past in another country.
It’s risk assessment, nothing more. A tenant may stop paying after one month, quite true, but their credit score, spending behaviour, savings and employment record gives the LL some, albeit limited insight into the chances of this. I will look at bank statements, I dont like doing this as it’s invasive, but I see this as a necessity. Mine get looked at when i want a mortgage. Current landlord reference means nothing to me.
I don’t think anyone’s talking about people that don’t pass credit checks, benefit recipients or asylum seekers. All I’m talking about is being self employed with no guarantor paying six month’s rent in advance vs someone employed, with no guarantor paying one month in advance. Since a tenancy is typically six month’s long anyway, the latter would obviously be infinitely more risky.
Tenant with no guarantor pays 6 months in advance. Tenant history is unconfirmed. Tenants stops paying rent. LL spends a fortune in legals in evicting plus loss of rent. The law is stacked massively in favour of tenant. Toughened legislation, compliance costs, difficulties in eviction and increased taxations has made landlords far more vigilant and selective. Plus there’s far more tenants than properties so ll has the pick. The real issue is difficulties and length of time of eviction.
The problem is your credit history cannot be confirmed, and therefore your “honesty” cannot be confirmed. How else can a landlord assess you? Lenders will treat you the same. A regular uk employed/self employed person will have a history that can be checked out.
I do agree that being employed has the illusion of being more secure than self employed. But I would take into account trading/employment length and “stability”.
Discretion is needed here, which in my opinion your situation wouldn’t be an issue for many landlords. I’ve taken tenants who have not “passed” referencing.
I have been self employed for over 50 years as well as being a landlord so I see both sides… as a s/e builder i had good records as proof of income and always used an accountant …Having accounts is the key to get a place Not every landlord believes 6 months upfront is the key
Agreed: I have this week had the court date for possession hearing of tenant that stopped paying rent December 2021 - the hearing is for 20 February 2023! Then think of the delays after that before Bailiffs … etc .
You would be suing them for a period after the initial 6 months that they were not paying. The whole point here is that their tenancy doesnt end after the initial term, it just becomes periodic and some tenants have stopped paying rent at this point knowing that it will take a long time for their landlord to evict them.
…because the contract was only six months thus everything is in order?
Tenant is employed, pays one month’s rent then loses his job. Contract is 6 for six months thus the landlord spends the rest of the time trying to get the tenant out. Nightmare situation.
That’s unique to my situation since I’ve just come from abroad, although the landlord I contacted heard the words ‘self employed’ and said immediately I would not pass the reference checks without knowing any more about my situation.
Although no amount of credit history, references, guarantors and checks will be as safe as being paid 100% in full for your six month contract…
Did he know that you had just returned from abroad? Self employed income is usually verified via accountant/SA302s. Referencing doesn’t just fail because of being self employed. It may just be LL preference and sees self employed as high risk.
True in some respects, but the whole picture is taken into account, its not just the money its the quality of tenant that also needs to be proven. Legitimate source of funds proof is needed + stability.
If the tenant has a fixed term tenancy of 6 months with no contractual provision for it to continue, then at the point that it expires and tenant is still in occupation, s5(2) of the Housing Act 1988 causes a periodic tenancy, (usually monthly) to arise automatically on the same terms and to continue indefinitely until brought to an end by other means, (such as eviction). There is nothing that the landlord can do to prevent this. He must serve notice to begin the process of ending the tenancy. A process which has been taking around 12 months on average over the last couple of years.