Renting a House with Mainly Savings

artbaron

Hello, I'll soon be looking to rent a house and need some advice on financial references. I've recently started working freelance from home so my income is very low and will be a few years, that being the nature of the business. However, I do have savings of six figures (rental costs I'd be looking at are £600 - £700 per month if that matters). So the first question is, is proof of savings OK instead of proof of income? I would be happy with paying 3-month staged advances, or even 6 month if need be, but I wouldn't want to provide a guarantor as I wouldn't put anybody in the position of asking (it's not that I'm worried about missing a payment, my credit rating is 100% and I've never been late with a payment ever, I just wouldn't want to ask anybody).

And the second question is, if savings are acceptable, what kind of proof is required? I have several internet accounts but I would not really want to give a stranger details of how much was in each unless I absolutely had to. Is it possible to give this information to a solicitor who could then vouch for me to the landlord without revealing any details?

Advice from everyone very welcome but if you're in the business please say as it would add a little more weight. I just don't want to find myself in the position that I've sold the house and I can't rent anywhere!

BTW Don't bother about the 'working from home' thing, it's just using a PC and not selling stock on ebay or anything.

Werdnal

Sorry, cannot help with any advice on the financial side, but concerned to hear about your plan to rent and "work from home". It can sometimes be a grey area, how much "working from home" can be construed as "running a business" from a rented property, but in most cases you will probably find the tenancy agreement specifically prohibits running any business or work related activities from the premises. Working from home for an employer, is very different to working from home for your business.

Even if you are not actively buying or selling, or having any customers, deliveries etc visiting you, if you are registering your freelance services at the rental address, you may find LLs take a very dim view of it. You might want to check this out first, before you start worrying about whether you will pass credit checks etc.

hcb42

the OP said not to worry about this.

It is entirely possible they freelance and simply work from home, so no problem there.

Paying six months in advance should overcome the issue imho...was ok for me a few years back

Werdnal

hcb42 wrote: »

the OP said not to worry about this.

It is entirely possible they freelance and simply work from home, so no problem there.

Paying six months in advance should overcome the issue imho...was ok for me a few years back

Thanks hcb I can read ! Despite what OP said, they should verify with any future potential LL that this in indeed "not a worry" for them! Surely, even working as freelance, there is a need to list this address as a contact for their freelance services?

hcb42

the power of linkedin and the internet!

franklee

Werdnal wrote: »

Despite what OP said, they should verify with any future potential LL that this in indeed "not a worry" for them! Surely, even working as freelance, there is a need to list this address as a contact for their freelance services?

Not necessarily depends on the nature of the work and if necessary if he has a alternative address to use as the official business address (relative etc).

My experience as a tenant with a similar problem has been that explaining during the viewing worked OK. It depends on if the particular landlord is happy to go with it or not, I've found payment upfront works. However if doing that the tenant wants reassurances the tenancy was going to last at least that long, proof of consent to let comes to mind.

What I did was put down a holding deposit on the rental (once the LL agreed and I'd passed the referencing), then exchange contracts on the sale, then sign the tenancy agreement.

artbaron

OK thanks, so advance payment might be enough (and as I say, the work from home isn't an issue as no business registration of address is required). Anyone have any other input - letting agents, landlords etc?

Mrs_Z

As long as the prospective tenant was upfront about their situation at the viewing stage, and offered say, 6 months rent in advance, I'd be happy to consider them. I'd still want to do referenes though for any county court judgements though but would ignore the income information.

artbaron

Cool, 6 months advance wouldn't be a problem for the right place. References are fine too and I don't have any CCJs or anything.

Does anyone have any more info on the second bit - about the solicitor vouching for account details rather than giving them to the LL direct?

franklee

artbaron wrote: »

Cool, 6 months advance wouldn't be a problem for the right place. References are fine too and I don't have any CCJs or anything.

Does anyone have any more info on the second bit - about the solicitor vouching for account details rather than giving them to the LL direct?

What I did was pay the first six months rent upfront and thereafter normal monthly payments. I was referenced in the usual way except for income referencing that I didn't provide any information for. I gave the letting agent my bank current account details and paid the rent with a cheque on that account as part of my id verification. I gave them my solicitors name so they could verify I was selling the house as I'd said. There was no need to give them details of any savings accounts or discuss amounts of savings as the rent upfront circumvented that. I went though a letting agent and they didn't bat an eye, just said they'd need to check if it was OK with the LL. If you've "interviewed" well at the viewing they will see you're responsible etc. and then you can discuss what they will accept, really you won't know what any one LL will agree until you ask personally.

N79

Werdnal wrote: »

Sorry, cannot help with any advice on the financial side, but concerned to hear about your plan to rent and "work from home". It can sometimes be a grey area, how much "working from home" can be construed as "running a business" from a rented property, but in most cases you will probably find the tenancy agreement specifically prohibits running any business or work related activities from the premises. Working from home for an employer, is very different to working from home for your business.

Even if you are not actively buying or selling, or having any customers, deliveries etc visiting you, if you are registering your freelance services at the rental address, you may find LLs take a very dim view of it. You might want to check this out first, before you start worrying about whether you will pass credit checks etc.

I second that the OP needs to think more carefully about this aspect whatever they might think.

This tenancy may not be an AST, depending on what the OP is proposing. This has advantages and disadvantages but the normal AST terms regarding tenure and notice will not apply.

Another potential disadvantage is that S11 (LL repairing obligations) ONLY apply to tenancies for "dwelling houses" which are wholly or mainly used as dwelling houses and so there is a risk that your LL may be able to pass repairing obligations on to you.

The test for a residential vs commercial tenancy is contained in Cheryl Investments -v- Saldanha [1978]. It takes surprising little "business" use for the tenancy to be commercial.