Renting - Self Employed

lynxptc

About to move out and get a place for the first time renting. Self employed with no accounts and therefore probably no proof of income, is this likely to be a problem with estate agents?

Alan_M_2

Yes, expect to be asked for a large deposit unless you can prove a reasonable income (upwards of £20K).

Doozergirl

No proof at all? Do you not pay tax, have an accountant at all?

If you have an accountant, they can ask them for a reference, otherwise, what Alan M says: I'd expect you'll be paying the first 6 months up front

lynxptc

I could show bank statements to show proof of money going in but I've never felt the need for an accountant when I can do it myself. I didn't know how strict estate agents and landlords were with having to see official accounts for the self employed or if they would even take you on if you didn't have the information.

jaype

I have just had this problem, trading for less than a year so no accounts - you will need a guarantor. Even though we showed savings of 40K+ the agent didn't care.

Doozergirl

If you are doing the accounts yourself then you must have some kind of official documentation, no? I'd put together what you have and ask if it is acceptable, but I suspect you will be asked for extra security. These things are often a case of black and white for a letting agent. An individual Landlord may be more forgiving.

SaraLovesMartin

Hey there. I had the same worry moving in January (started new business + lots of random freelance work, only previously rented from friends nd family), and it was actually less stressful than I imagined. Most places wanted your annual income, an accurate guess will do, bank account details, and they run a simple credit check. References from past landlords seemed more important, but they seemed happy with my parents and best mate vouching for me! If you're new to renting whilst freelancing though it's more important to accurately predict what you can afford, taking bills and council tax into consideration, and make sure you give yourself some leeway. If you are confident you can pay and cn prove yoursefl credit-worthy you should be fine and get away with the now standard 6 wks deposit.

This was just my experience with smaller estate agents around North London, and it all went smoothly.

Alan_M_2

A self assessment tax return is acceptable proof of income.

Bank statements are fine, but all they show is cashflow, which in reality is nothing to do with income.

Historically I feel this is where our credit system falls woefully inadequate. The days of a job for life no longer exist and I'd suggest that many self employed people actually have greater job security.

I no longer have this problem as I now run a Ltd company, but for many years I had to put up with the scrutiny of all and sundry whenever I needed anything,

My advice, get an accountant, I regret not doing that years ago, the extra expense incurred will be comfortable recouped in ways other than just purely financial.

franklee

In pretty much the same position I just pay the first six months rent up front. Thereafter I pay monthly but the latest agent did up the deposit from 4 to 6 weeks at that point. Like you I do my own accounts. Besides I simply don't want to go down the route of arguing over my income with an agent when I've plenty of savings to fall back on. I find it strange that agents really don't get the concept of sporadic high earnings that some freelance workers can have. It's as if they can't grasp the concept of savings, they think I might just spend it all! The irony is that it's my employed friends who spend their whole earnings, have debts for things like cars and have practically nothing to fall back on so are the worse risk IMO.

lynxptc

Will most agents let you pay the first six months upfront then? I assume they will still need to do some checks but will a guarantor still be needed?

Alan_M_2

If you're paying 6 months up front, there's no need for credit or security checks. After all, what do they need security for? They have your money, there is no better security.

If you're in a position to pay 6 months in advance you are actually an ideal tenant and in a stronger position than the average Joe.