Rejected Estate Agent Credit Check - Failed the "Affortability" criteria

koloko

Hi

We saw a house in the paper recently and after viewing it decided we would like to rent it. The Estate Agent asked us to fill out a credit check form.

Our finances are relatively healthy;

I earn £32,000 a year (+avg £10k bonuses)
My wife earns £30,000 a year
Both employed full time for the same companies for the last ten years
No debt (although this wasn't asked for on the credit check form)
High monthly savings to expenditure ratio

Our current rent is £850 a house and the house we viewed was also £850 month. We have lived in the current house for 3 years and have a great relationship with our landlord, who has provided a positive reference.

After applying for the property, we were told that we had failed the "affordability criteria", on the credit check. I was told to ask my parents to act as a guarantor; my dad is retiring next year so I won't be doing that. We have let the property go.

Could anyone explain what an affordability criteria is, and what I can do to improve it next time?

hazyjo

How much is the house you're interested in?

What has it got to do with the EA... do you not have an AIP in place through a mortgage broker/provider? That surely would have sufficed.

Jx

koloko

It's renting, not buying. The credit check forms were given to the estate agent, who sent them to an unknown third party, and provided the feedback.

Sorry - what's an AIP?

Good_Money

AIP = (mortgage) Agreed in Principle

A bank or building society could give you a statement to say they have a agreed to lend you £xxx,000

I don't know if you can get anything similar for renting.

BitterAndTwisted

On a combined income of over sixty grand the credit-checks said you can't afford to rent a property at the same rent you are paying now? There must have been some error on the application forms. One person on thirty grand salary should be able to afford £850 a month in rent.

Perhaps you should query the criteria the agent used when they processed your application. It doesn't make any sense to me. Did they ask to see your bank statements?

I'd be minded to see another agent and apply for another property and see what their checks reveal.

koloko

Thanks BitterandTwisted.

At £160 a go, I'll limit the number of these credit checks I do! (Although we will get £80 back after failing it, so not all doom and gloom). The one major thing that suprised me was that these affordability checks don't ask you about your debts. Monthly income is meaningless without asking about monthly expenditure IMO

If we see the right property I'll re-apply elsewhere and update this thread. Thanks

DVardysShadow

I go with B&T on this, it looks like an error in processing the data.

Either that or the LL is insisting on guarantors and the LA are just going through the motions to collect a referencing fee.

If you have a lot of savings, you could offer 6 months rent in advance.

pmlindyloo

Strange one.

The failing of the affordability part doesn't make any sense.

Only things I can think of is if you have had CCJs/Bankruptcy in the past.

I agree that you should ask the EA why you failed - just tell them you want to be 'armed' for the future.

nzseries1

Call me skeptical, but how can we even be sure that the house is genuinely for rent, and the agents aren't simply signing people up, then failing them on something totally made up, i.e. "affordability", "landlord's changed his mind", "the planets are incorrectly aligned", and then simply keeping your non-refundable application fee and showing you the door?

DVardysShadow

nzseries1 wrote: »

Call me skeptical, but how can we even be sure that the house is genuinely for rent, and the agents aren't simply signing people up, then failing them on something totally made up, i.e. "affordability", "landlord's changed his mind", "the planets are incorrectly aligned", and then simply keeping your non-refundable application fee and showing you the door?

I agree. I am almost at the point of saying that with a combined income of £72000 and rent at £850, the OP should demand the whole of the referencing fee back. Perhaps this should be considered seriously if OP has no adverse credit -CCJs and bankruptcy.

BitterAndTwisted

To be honest, the rental market is so bouyant at the moment I sort-of doubt that even the most venal of agents would need to stoop so low. Mind you, having a read on this part of the forum for five minutes could indicate that I'm being very naive