LA asked for bank reference, help please!

artinias

Hey guys,
Here's my situation, I'm a BSc student (just finished my first year) and am in receipt of student loans and a weekly wage from work (Avg £50pw but goes up to ~£100pw over summer hols). I currently live with my parents but am looking at doing a house share with my best friend as my parents are moving and won't have the room for me.

We've found the perfect house (2 bed terraced @ £395pcm) and we're gonna go for it, the letting market around here is essentially dying and this house has been up to let for 4 months now.

But, the LA has asked for a reference from my bank, in the form of statements for the past 3 months, and my statement shows my balance going from £1500 slowly decreasing to £1000- overdraft (Arranged overdraft 0% AER, repayable a year after graduation), but I still have my wage going in each week and my student finance will kick in again in early september. I'll also be getting some help from family towards the rent.
Should I make a note on the statements stating this? Should I also explain the fact that my balance is like this because I'm still living with my parents and haven't had to worry about bills, but I'll become more responsible when I'm living off my own back?

In other words, I'm quite worried about getting declined because of this and would cherish any advice you can give and if you could tell me if I really should be worried :eek:

Many thanks in advance!!

ognum

I think any explanation would be useful, you may require a guarantor.

kingstreet

If they are asking for statements for the same reason as a mortgage lender, they are looking for examples of poor account conduct, such as unpaids and unauthorised borrowing charges, not for how much your bills are or if you have an agreed overdraft.

If in doubt, ask them the purpose of such documentation.

artinias

kingstreet wrote: »

If they are asking for statements for the same reason as a mortgage lender, they are looking for examples of poor account conduct, such as unpaids and unauthorised borrowing charges, not for how much your bills are or if you have an agreed overdraft.

If in doubt, ask them the purpose of such documentation.

Would my decline in balance count as poor account conduct? And I asked and their answer was (along the lines of) "To see if you could afford it", but as I said, my statement isn't representative of my actual financial position as I'll be getting help ONCE I've got a place.

Guest101

Personally I cant stand people thinking that personal bank details are open for scrutiny, but if you're happy to show them...

Probably provide your letter from student loan company to show what you will get.

pmlindyloo

You need to look at this from a landlord's point of view. To him/her this is a business. The LL is basically interested in the rent being paid each month.

To a LL you are a student with very little income and relying on student finance. You are in overdraft with your bank and have no savings. Do you seem like a good prospect? Absolutely not.

So, options.

If your housemate is in a good job with a good salary and you have a joint tenancy (ie. either one of you is good for the rent as you have joint liability) then you may be OK.

Would your parents be guarantors? This is probably your best option. Make sure they understand what being a guarantor means.

If neither of these options work then you are far better off in shared accommodation in a student type house where the rent will be less and the LL probably not too demanding as regards credit checks etc.

artinias

Guest101 wrote: »

Personally I cant stand people thinking that personal bank details are open for scrutiny, but if you're happy to show them...

Probably provide your letter from student loan company to show what you will get.

Well this is the only place that we can both afford, I refuse to go into renting a room in someone elses house as theft rates in this town are sky high and I have trust issues as it is. I don't really have a choice but to share

artinias

pmlindyloo wrote: »

You need to look at this from a landlord's point of view. To him/her this is a business. The nll is basically interested in the rent being paid each month.

To a LL you are a student with very little income and relying on student finance. You are in overdraft with your bank and have no savings. Do you seem like a good prospect? Absolutely not.

So, options.

If your housemate is in a good job with a good salary and you have a joint tenancy (ie. either one of you is good for the rent as you have joint liability) then you may be OK.

Would your parents be guarantors? This is probably your best option. Make sure they understand what being a guarantor means.

If neither of these options work then you are far better off in shared accommodation in a student type house where the rent will be less and the LL probably not too demanding as regards credit checks etc.

Not sounding too good for me then My housemate will be receiving housing benefit each week to cover her share of the rent. My parents may agree to be guarantors, but I don't wanna push them because they've already agreed to pay the deposit.

As for the shared accommodation, in addition to my woes stated in my previous post, I'm doing my BSc in a college which is usually dedicated to further education and there's only me and around 25 others who are doing a HE course there, and most of them still live with their parents.

And can I say guys, thank you so much for all the help you've provided so far!

sandsni

Unfortunately for you, the LL may not want to take the chance on your "projected future income", which may or may not materialise. They can only base their decision on what your finances are like now.

They need to know you can afford to pay the rent for the full tenancy period, not just when your income is boosted temporarily.

A guarantor would definitely help, but your parents (or whoever) would need to be in a position to cover their own expenses PLUS yours if the need arose, so the criteria for a guarantor is higher than for a tenant.

artinias

sandsni wrote: »

Unfortunately for you, the LL may not want to take the chance on your "projected future income", which may or may not materialise. They can only base their decision on what your finances are like now.

They need to know you can afford to pay the rent for the full tenancy period, not just when your income is boosted temporarily.

A guarantor would definitely help, but your parents (or whoever) would need to be in a position to cover their own expenses PLUS yours if the need arose, so the criteria for a guarantor is higher than for a tenant.

Well, I get on average £50pw from my work, which increases to around £100pw over the summer hols. £50 x 52(weeks) / 12(months) = £216.6, which covers my £197.5 of the rent. Would they accept this as me being able to afford the rent?

sandsni

artinias wrote: »

Well, I get on average £50pw from my work, which increases to around £100pw over the summer hols. £50 x 52(weeks) / 12(months) = £216.6, which covers my £197.5 of the rent. Would they accept this as me being able to afford the rent?

Doesn't leave you much for food, cleaning materials, utilities, replacing light bulbs, fixing any damage you and your friend might cause (even if it's accidental).

These are the sort of things a LL or LA should be taking into account when deciding whether you are a good risk regarding affordability. It's not just whether you can scrape the rent together, but whether, if things are that tight, you are likely to default on the rent when another bill comes in.