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Agent asking for annual income to be 30 times monthly rental
chickmug
Posts: 3,279 Forumite
Saw one EA advertising this and coupled with their needing proof of annual income. Is the 30x a standar formula and does one have to give proof of income when renting.
A retired senior partner, in own agency, with 40 years experience in property sales & new build. In latter part of career specialising in commercial - mostly business sales.
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Comments
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If you want to rent a property that is advertised under those terms, then YES, you will have to prove your income.
There is nothing to stop a private landlord imposing terms such as this. It's their property and their business.
An annual income of 30 x the monthly rent equates to your monthly income being 2.5 times the monthly rent, or the monthly rent being no more than 40% of monthly income if you look at it that way round.
It is a measure of the affordability of the rent and it is advisable not to exceed 40% otherwise you will probably start to run out of money, get into debt, arrears on your bills and council tax and then not pay your rent.
It is a similar level to that recommended for mortgage affordability if you buy a property.
Quite reasonable if you ask me. Protects the landlord and the tenant.British Ex-pat in British Columbia!0 -
As a renter, it seems ok to me. It's round about what I pay and earn.
Certainly weeds out the people who cannot understand how to budget.
I didn't have to prove, th onus was on me to be sensible, but as the last few years have shown, many people seem to overstretch themselves for something they aspire to having/owning/living in.0 -
agree the inital calculation sounds scarey, but a £500 rent pm means a £15,000 pa gross income which sounds very reasonable, any less earnings and you will struggle to afford all the costs of running a home.
I think all LA's ask you to prove income and if the LL wants rental insurance and credit checks it will need proving for those.0 -
Saw one EA advertising this and coupled with their needing proof of annual income. Is the 30x a standar formula and does one have to give proof of income when renting.
That's the standard formula for most tenant referencing/credit checking agencies - although one does the multiple x24 - it means if the rent is £800 you have to earn 24k for it to be considered affordable or £19.2k on the least stringent.... add in bills and they are fairly realistic figures in my opinion.0 -
When we rented the LA asked for proof of income.
30x looks a sensible level.0
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