Bad Credit Means Being Treated Like A Criminal

PaulMNorth

Hi all,

I have been having a nightmare trying to rent a property due to poor credit history.
In short, I had previously had large CCJs against me due to a failed business a few years back. However, these are all now "satisfied". We recently sold our property and have somewhere in the region of £70k in the bank. Now we have sold the house we need to rent somewhere.
I have been applying all over the place to rent a 2/3 bed house and have said I am more than happy to pay 12 months up front and then do ongoing at 6 monthly intervals.
Apparently we are no longer allowed to give more than 5 weeks rent as a security deposit because of Goverment restrictions.
However, every letting agent I have been too have so far treated me like I am some sort of criminal won't entertain me. I have broken no law, I am a responsible person who happened to be a director of a company that failed due to tough times, that's all.
Aside from paying up front I really don't know what else to do.
They want to encourage people to pay for their own properties but at this rate I will of spent all of my money on non credit checked 'holiday lettings' about 6 times faster than I would if I would just be allowed to rent.
The problem is even paying up front basically means nothing to most. New laws from 1st June (I don't know what they are) restrict certain landlords government backed insurances and they wont accept it.
Any advice on what to do would be greatly appreciated. Just when I thought I had levelled out bad debts another hurdle just comes up.

Thanks in advance for any help.

sal_III

I don't want to sound critical, not knowing all the facts etc. but the only 3 scenarios that I could think of where you would end up paying personally for a limited company collapse are:

a) You were order by court to repay creditors, because you were found guilty of not exercising ‘duty of care’
b) You acted as a guarantor for some of the limited company debt
c) Your company owed PAYE tax/NI

In any case not settling the debt before it came down to CCJ is evidence of poor financial management.

If the rental market in the area is buoyant the LA is exercising duty of care towards their customer - the LL and prioritises other more suitable in their view tenants. There is nothing personal and has nothing to do with being treated like a criminal - it's just good business practice.

Your options are:
- Offer 6-12 months in advance. You have already tried it, but did you insist that the LA conveys their offer to the LL? LAs are like robots (and much of them has about as much autonomous brain function) and will just fail you based on the CCJ, even if the LL is happy with the risk provided there is securyt in terms of rent being paid well in advance.
- Offer to pay higher rent. I know it's harsh, but this might sway some LLs to take your offer.
- Check local Housing associations if they have something that is not on the LAs books.

tom9980

Landlords warned government this would happen if they kept introducing laws and now it is.....strange that. Landlords are selling up and/or being much more selective.

Your best bet is to be persistent and honest.

G_M

OP did not mention a limited company. If the company was not limited, the Director can be chansed for company debts I believe, hence the CCJs.

But whatever, many landlords would prefer to let to a tenant with a clean credit history and therefore evidence that they manage their money and pay what they owe, in preference to someone who shows evidence that they do not always pay what they owe.

Having said that, 12 months upfront can often help - depsends on the landlord. But LLs are sometimes wary even of that as it is common for cannabis farmers and brothel owners to pay in this way in order to keep the LL at bay during the tenancy.......

AdrianC

PaulMNorth wrote: »

I have been having a nightmare trying to rent a property due to poor credit history.
In short, I had previously had large CCJs against me due to a failed business a few years back. However, these are all now "satisfied".

How recently?

We recently sold our property and have somewhere in the region of £70k in the bank. Now we have sold the house we need to rent somewhere.

I presume that the sale was not voluntary, and was needed to release equity to cover your personal guarantee of the business debts?

I have been applying all over the place to rent a 2/3 bed house and have said I am more than happy to pay 12 months up front and then do ongoing at 6 monthly intervals.
Apparently we are no longer allowed to give more than 5 weeks rent as a security deposit because of Goverment restrictions.

But that's the deposit against you leaving the place in a state. It doesn't stop you paying rent in advance.

The problem with that is simply that paying 6/12mo rent in advance doesn't mean you're going to pay month 7 or 13 onwards. It's also been a favoured tactic of those who want to use the property for illicit reasons - especially certain horticultural activities, or as a base of activities for ladies of negotiable virtue.

However, every letting agent I have been too have so far treated me like I am some sort of criminal won't entertain me.

It's not ultimately up to EAs/LAs as to whether you're accepted on renting a property or not. It's up to the landlord.

As you say, you've been involved in managing businesses. Perhaps the business failure was precipitated by customers not paying... So would you prefer to extend credit to a customer with a documented credit history that includes several CCJs, or one without?
Why would people running residential lettings businesses be any different?

G_M wrote: »

OP did not mention a limited company. If the company was not limited, the Director can be chansed for company debts I believe, hence the CCJs.

If the company wasn't limited, it isn't a company, and doesn't have directors. It's kinda the definition of a company and a director...

Comms69

PaulMNorth wrote: »

Hi all,

I have been having a nightmare trying to rent a property due to poor credit history.
In short, I had previously had large CCJs against me due to a failed business a few years back. However, these are all now "satisfied". We recently sold our property and have somewhere in the region of £70k in the bank. Now we have sold the house we need to rent somewhere.
I have been applying all over the place to rent a 2/3 bed house and have said I am more than happy to pay 12 months up front and then do ongoing at 6 monthly intervals.
Apparently we are no longer allowed to give more than 5 weeks rent as a security deposit because of Goverment restrictions. - that is correct, but it doesn't apply to paying rent upfront
However, every letting agent I have been too have so far treated me like I am some sort of criminal won't entertain me. - Well many criminal gangs pay large cash payments upfront, so that isn't too surprising. I have broken no law, I am a responsible person who happened to be a director of a company that failed due to tough times, that's all. - well the fact you have CCJs is evidence you aren't responsible, but that's by the by
Aside from paying up front I really don't know what else to do. - try openrent
They want to encourage people to pay for their own properties but at this rate I will of spent all of my money on non credit checked 'holiday lettings' about 6 times faster than I would if I would just be allowed to rent. - who's they?
The problem is even paying up front basically means nothing to most. New laws from 1st June (I don't know what they are) restrict certain landlords government backed insurances and they wont accept it. -no they dont
Any advice on what to do would be greatly appreciated. Just when I thought I had levelled out bad debts another hurdle just comes up.

Thanks in advance for any help.

Try landlords who don't use letting agents

PaulMNorth

sal_III wrote: »

I don't want to sound critical, not knowing all the facts etc. but the only 3 scenarios that I could think of where you would end up paying personally for a limited company collapse are:

a) You were order by court to repay creditors, because you were found guilty of not exercising ‘duty of care’
b) You acted as a guarantor for some of the limited company debt
c) Your company owed PAYE tax/NI

Thanks for the reply.
It was B essentially. Either way, i personally tried to bail out a company by paying a supplier. It backfired and I was left with a debt. I couldn't afford to repay as my major client got taken over and I lost that income which was covering the debt. The debt was placed on a charging order only to be repaid when the house was sold if I could not repay it before.
That was a mistake yes, but I have to live with it.

What I am struggling to understand is that there is 0 financial risk to the LL. I am paying up front and have openly said we can renew the lease 2 months before renewal so they always have 2 months 'in the bank' to either ask us to leave or be happy to renew.

I have stressed more than happy to pay up to 18 months up front but as you said a lot of the LA's are like robots and it appears cannot be bothered to even tell the landlords.

The market around here is fairly buoyant but I have limited expectations and approached properties which have been on the market for ages or are overpriced for what they are (and have been on the market for a long time because of it).

What was annoying for me was the estate agent we sold with was very positive and said "don't worry we have lots of landlords who will accommodate you", of course as soon as the house sold and they had been paid their fees they changed their tune.

I should also add I have guarantors with very favourable credit ratings but this does not seem to hold any weight with LA's. I know its all of my own doing, but its so frustrating.

hazyjo

It can take 6+ months to evict. The LL risks being without rent for that time, plus the expenses of courts, eviction, damage, etc. Not suggesting you won't pay or would cause any probs or damage, but surely you can see it's certainly not zero financial risk to a LL! They don't know you, they can only make a judgement on your financial history. Sad as that is. As above, look for a private LL.


Good luck.

Smodlet

Hello PaulMNorth. Your situation resonates with me; that's all I will say except that there are other circumstances which could result in your position other than those sal III has mentioned.

I have no idea whether this option is of any use to you whatsoever but there are areas of the country where it is possible to buy a 2/3 bedroom house outright for £70k: You really do need to be flexible on location for this to work and I understand this is seldom possible.

As sal III says, you may feel you are being treated like a criminal but that is not really the case. It is (understandably) an emotional response to a purely financial transaction. <Aside> To call LA's "bots" is to insult bots, imho.

You have been through the fire, by the sounds of it, but are now rising from it. Please do not allow a bunch of soulless LAs to bring you down.

Have you tried a site called "openrent"? I believe, from what I have read on here, that this site is used by landlords so might offer the opportunity to communicate with them directly and avoid LAs altogether. The consensus seems to be that LLs are sometimes more human and less rigid in their approach than LAs.

Good luck to you. There is a brighter day ahead; it may be a while coming but you will find it if you just refuse to give up. You worked hard and gave up a great deal for that £70k; make it work for you, not for parasitic LAs, OK?

Comms69

Smodlet wrote: »

Hello PaulMNorth. Your situation resonates with me; that's all I will say except that there are other circumstances which could result in your position other than those sal III has mentioned.

I have no idea whether this option is of any use to you whatsoever but there are areas of the country where it is possible to buy a 2/3 bedroom house outright for £70k: You really do need to be flexible on location for this to work and I understand this is seldom possible.

As sal III says, you may feel you are being treated like a criminal but that is not really the case. It is (understandably) an emotional response to a purely financial transaction. <Aside> To call LA's "bots" is to insult bots, imho.

You have been through the fire, by the sounds of it, but are now rising from it. Please do not allow a bunch of soulless LAs to bring you down.

Have you tried a site called "openrent"? I believe, from what I have read on here, that this site is used by landlords so might offer the opportunity to communicate with them directly and avoid LAs altogether. The consensus seems to be that LLs are sometimes more human and less rigid in their approach than LAs.

Good luck to you. There is a brighter day ahead; it may be a while coming but you will find it if you just refuse to give up. You worked hard and gave up a great deal for that £70k; make it work for you, not for parasitic LAs, OK?

Blimey you recovering from a PPR or something?

AdrianC

PaulMNorth wrote: »

What I am struggling to understand is that there is 0 financial risk to the LL.

Wrong.
There is substantial financial risk.

He is handing you the keys to an asset worth several hundred thousand pounds. If and when you do not pay the rent, whether that starts at month 2, 7, 13 or 19, he is facing a long and expensive procedure before he can regain legal control of that asset from you.

You have a recently-proven track record of being legally adjudged not to have paid your debts on time.

For a guarantor to be any use whatsoever, the legal procedure multiplies. First, he has to regain possession. Then he pursues you through the courts for the debt. You fail to pay, he obtains a CCJ. He then applies to the courts to pursue the guarantor. Maybe the guarantor then tries to claim he isn't liable, or can't pay.

Can you see why you are a more substantial financial risk to his business than the person standing next to you, who also wishes to rent that property, but has a clean credit history?