Tenant passed all reference checks, but failed affordability

Landlord Discussion
1

Hi everyone,

I’m a first time landlord with mortgage, and looking for some advice from other landlords regarding a referencing issue I’ve come across on OpenRent.

I recently completed referencing for two prospective tenants. They passed all checks (ID, credit, current landlord gave them very good reference etc.), but failed on affordability. I’m still hoping to continue because:

  • Both of them seem like very nice, clean and respectful people, they are always very polite and see the house as their dream home.
  • They have provided a minimum 3 months bank statement, shows they are always paying their rent on time, and they definetly have the affordability.
  • They also receive sufficient housing benefit to cover the rent.

The report shows their income as £0, which doesn’t seem accurate as they are both receiving benefits (e.g. Universal Credit / Housing Benefit) and the amount is definitely over 2.5 times the total rent amount. One of them have a new UK bank account because just moved from Ireland, and another adult’s benefit is sent to their mother’s bank account, which is why the report shows their income as “£0”.

From what I understand, it looks like the system may not be recognising benefits as income, which has led to the affordability failure.

My questions are:

  • Has anyone experienced something similar with tenants on benefits?

  • Is there a way to get OpenRent to manually reassess affordability if the tenants provide supporting documents (e.g. UC award letters, bank statements)?

  • Or is this just a limitation of the referencing system?

  • Also, OpenRent won’t be able to provide Rent Guarantee Insurnace in this kind of situation, will I still be able to buy Rent Guarantee Insurnace?

I’m trying to understand whether this is something that can be resolved, or whether I need to consider alternatives (e.g. guarantor, upfront rent, or different referencing providers).

Would really appreciate hearing how others have handled this.

Thanks in advance!

2

Openrent referencing does include benefits, but from my experience via open banking link to bank account.

They do not have a system to upload other documents in support.

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@Lisa89

Tbh sounds like a scam

be suspicious - if it’s not going to their account why do you believe they are receiving it? If it was being forwarded from other accounts it would still show as credits every month and OR referencing using openbanking would see those. It could be they have no income and are trying to pretend their mothers HB is their own.

Previous LL ref is useless they may be trying to move bad tenants on

Docs can be faked so OR don’t accept

I would insist on a guarantor - if the guarantor passes then OR and other insurers may then offer RGI

Or just find some other tenants who pass - it’s not your problem..

Good luck

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alternative is another set of tenants

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