Six months' rent in advance to avoid failing credit check?

Will_K

My partner and I viewed a really nice property tonight and want to rent it. We were talking to the letting agent about the credit check and because I have only recently become gainfully employed again after a while I was worried about failing the credit check. The agent said there's the option to secure the property by paying six months' rent up front. It's a legitimate agency so my question is; Is this normal/kosher, providing the contract states that we have paid the rent up front?

Any help would be greatly appreciated.

Jowo_2

Tenants considered to be risky, such as students, self-employed without a few years of accounts and HB/LHA claimants, are often asked to mitigate the risk by paying up to 6 months rent in advance or offering a guarantor (usually a property owning person in the UK with an income than pay the rent if the tenant doesn't).

So it is fairly common but the potential risk of paying up to 6 months rent in advance is if the landlord has the property repossessed when the originally had a residential mortgage and never asked permission from their lender to let the property. Ask for proof and have a look at Miss Moneypenny's thread on this subject or the section of the Shelter website that gives info to tenants who find that the property they rent is getting repossessed.

A secondary risk is that some landlords or agents can be less incentivised to do repairs (not that there are many instances where tenants can withold the rent, unless due process is followed to pay for repairs themselves and deduct it from the rent).

Can you offer a guarantor?

EDIT - misread original post and assumed OP was newly self-employed. A person with a new job doesn't automatically get considered a risky tenant where greater payment of rent in advance is common.

Are there any other factors, other than new employment, that is likely to impact the credit record, such as CCJs, defaults on loans/etc?

Will_K

Thanks for the response, Jowo.

Good to hear it's fairly common. The repossession aspect I have already considered and asked the agent at the viewing whether the LL had a buy-to-let mortgage, but would obviously want solid proof before handing over that much money.

I searched for Miss Money Penny's thread, but couldn't find it, could you provide a link?

Thanks for pointing out the incentive aspect, I hadn't considered that.

I can probably offer a guarantor, but not sure if this would be acceptable to the LL.

Are there any quick online credit checks I could use to find out whether I'd pass the agent's credit check?

Thanks again for your reply.

tbs624

Don't pay 6 months rent upfront, except as an absolutely last resort.

If your only "problem" is the new employment you should be fine. (Be aware that the LA will probably want to credit check both of you and charge a nice fat double fee for doing so) Ask which third party agency the LA uses. See here for an example report and here for more info on what the checks look at

If possible go via a local LL association and use a LL who self manages his/her own properties - they have more flexibility and you are unlikely to be charged the plethora of random admin charges with which LAs love to slap potential tenants.

On the subject of guarantors it is not always necessary for a guarantor to be a home owner - some LAs/LLs make that stipulation so that they could ultimately have the option of slapping an order on the guarantor's own property if they failed to meet their obligations, but not all do.

Get written confirmation from the LA that the LL has lender's consent to let ( if the rental property is on a mortgage)

If you haven't rented before have a look at the "sticky" for new renters up at the top of the board.

franklee

Will_K wrote: »

I searched for Miss Money Penny's thread, but couldn't find it, could you provide a link?

That's here:
http://forums.moneysavingexpert.com/showthread.html?t=1377883

Will_K

Jowo wrote: »

Are there any other factors, other than new employment, that is likely to impact the credit record, such as CCJs, defaults on loans/etc?

No, I have had one failed credit card application (which I believe damages your credit rating) and a £1,000 (interest free) overdraft (graduate account).

tbs624 wrote: »

If your only "problem" is the new employment you should be fine. (Be aware that the LA will probably want to credit check both of you and charge a nice fat double fee for doing so) Ask which third party agency the LA uses. See here for an example report and here for more info on what the checks look at

The other problem is that my current job only pays a "training wage" of £175 a week (tax/NI exempt). I have other income which means I can more than cover the rent, it's just the credit check I'm wary of.

The agent said that we could list my partner as a tenant, but that I would be the only one to be credit checked as she is a student and that it would mean a £35 fee for my partner.

tbs624 wrote: »

Get written confirmation from the LA that the LL has lender's consent to let ( if the rental property is on a mortgage)

If you haven't rented before have a look at the "sticky" for new renters up at the top of the board.

Thanks, tbs624, I will get the property details from the land registry site.

I have printed off the sticky for new renters (very useful! :T), just wanted more details specific to my situation.

franklee wrote: »

That's here:

Thanks for the link, franklee, I will read through it in more detail in the morning.