Failure to carry out affordability check

_Penny_Dreadful

Jaytee said:

@_Penny_Dreadful it’s a one bedroom flat in Islington. She doesn’t have a guarantor so potentially it’s in his name only. Maybe I’m clutching at straws but he is only 19 and totally naive. Not a legal defence but I thought sone due diligence on the part of the letting agency would weed out this sort of thing.

Landlords don’t need to reference tenants at all save for Right to Rent checks. You’d need to be bonkers to forgo referencing in my opinion but it seems to have worked out for @theartfullodger at least once. It sounds like your son has paid a £450 holding deposit whilst he and his girlfriend are being referenced. Hopefully that’s as far as things have got and the contract he has signed isn’t the tenancy agreement itself. I can’t see the tenancy being offered solely in his name as no amount of frugality will make up for the deficit between your son’s net monthly income and the £2200pcm rent that’s due. I’d be interested to know exactly what your son and his girlfriend told the letting agent to try and get this over the line.

Jaytee said:

@user1977 My understanding is that they wanted a guarantor for her but happy to proceed without one for him. God knows why. 

With a joint tenancy each of them has joint and several liability for paying the whole rent. Legally speaking there’s no such this as his share and her share. A guarantor (when the guarantee is properly executed which many are not) becomes liable for the same as the tenant. This means that had you agreed to be guarantor and the rent was short then regardless of which one of them hadn’t paid you’d be on the hook for it. I can’t fathom why the letting agent would ask for one tenant to have a guarantor but not the other when each tenant has the same liability for paying the whole £2200pcm.

lincroft1710

MikeJXE said:

FreeBear said:

Myci85 said: If it helps gain perspective, their brains are not fully developed until age 25, and the logical part is the last part to mature 😉

Some don't mature even at 50

Totally agree, I have 2 sons 55 and 48 and don’t believe they will ever act logically 

Mrs L is nearly 80 and when it conflicts with her belief, logic just flies out of the window!

RHemmings

DullGreyGuy said:

RHemmings said:

user1977 said:

RHemmings said:

Probably I shouldn't post this until we know the EA is a member of TPOS or not. But, I was curious and did a quick google. This case study is based on a complaint from a landlord concerning what appear to be very dodgy tenants (faked references, faked other information.) But, at the very end there is this paragraph:

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/check-check-and-check-again-for-fraudulent-references

In addition, the Ombudsman would also have expected the agent to have assessed whether the tenancy was affordable for the tenants. Acting on the basis that the employment information was true (and it was not) the rent still accounted for 73% of the tenants’ joint income. The usual threshold for affordability is 40%. Had affordability checks been carried out, it was unlikely that the tenants would have passed those checks.

Again, that's about the obligations which the agent might have to the landlord, not duties to the tenant. We don't know what the arrangements are between this landlord and the agent - perfectly possible that the landlord is fine with whatever the agent is doing here.

Yes, I said that this was a complaint by a landlord. What I think is relevant is that TPOS considers 40% of income to be the limit of affordability. 

Is that UK wide or specifically London? Can't see the stat on their website. The average in London is 36% -v- the UK of 26% but the worst was in 2017 when the average was 50.3%

Seems a relatively low limit given how close the average is to it. 

For TPOS, I only have the number from that one particular case study. It doesn't say where the property in question is located. I had another look to see if I could find any more information from TPOS, but couldn't. So, that's the only number I have. ONS (as before) says 30% of the median salary of renters in the area. Other sources say income should be 2.5 times total rent, which is 40%. Yes, those are close to the average rent proportions of income. 

I don't want to fall into debating house prices or the economy. I was solely looking to see what numbers TPOS would consider affordable. 

MikeJXE

lincroft1710 said:

MikeJXE said:

FreeBear said:

Myci85 said: If it helps gain perspective, their brains are not fully developed until age 25, and the logical part is the last part to mature 😉

Some don't mature even at 50

Totally agree, I have 2 sons 55 and 48 and don’t believe they will ever act logically 

Mrs L is nearly 80 and when it conflicts with her belief, logic just flies out of the window!

Because a marriage is made up of 2 parts

One thats right and the other the husband

Happy wife happy life

Jaytee

Hi all
Thought I would jump back on. Thank you to all. 
He is an adult in age but given that he is only 19 and in love which makes you do crazy things (ah to be young) he isn't thinking with his brain. To a degree I am sympathetic. Got to cut the apron strings at some point.
He has paid the £450 for referencing etc. The landlord has been giving them all sorts of chat about how the bills are low and the flat is a bargain etc. We have agreed that we will talk to the gf's parents together with them and decide how they can achieve their dreams of independence in a more affordable way.
Thank goodness they haven't signed a contract. I am interested to see what the EA comes back with. 
I really do appreciate all the knowledge and advice - even the blunt advice. I am already guarantor for my 21 year old in student accommodation but his rent in a flat share is only £350/month so hardly comparable. I am not going to alienate my 19 year old. He is engaging with his boring old parents and I believe the reality is beginning to dawn on him. 

_Penny_Dreadful

Jaytee said:

Hi all
Thought I would jump back on. Thank you to all. 
He is an adult in age but given that he is only 19 and in love which makes you do crazy things (ah to be young) he isn't thinking with his brain. To a degree I am sympathetic. Got to cut the apron strings at some point.
He has paid the £450 for referencing etc. The landlord has been giving them all sorts of chat about how the bills are low and the flat is a bargain etc. We have agreed that we will talk to the gf's parents together with them and decide how they can achieve their dreams of independence in a more affordable way.
Thank goodness they haven't signed a contract. I am interested to see what the EA comes back with. 
I really do appreciate all the knowledge and advice - even the blunt advice. I am already guarantor for my 21 year old in student accommodation but his rent in a flat share is only £350/month so hardly comparable. I am not going to alienate my 19 year old. He is engaging with his boring old parents and I believe the reality is beginning to dawn on him. 

Thanks for the update. I never thought I’d see the words, “Islington,” and, “affordable,” together in one sentence.  This is a landlord’s market at the moment as demand for rental properties is outstripping supply. Generally speaking landlords are being inundated with applications when a property is advertised so a landlord willing to entertain a young couple who clearly cannot afford, unless they’ve been told something completely different to us about the couple’s income, the property is a red flag to me.  What is wrong with the property that it hasn’t been snapped up by a more desirable (at least on paper) tenant?