Reference checks

Reference checks, also called tenant referencing, are the pre-tenancy enquiries a landlord or letting agent carries out on a prospective tenant before granting a tenancy, to assess the risk of rent arrears, property damage, or tenancy failure, and to comply with the legal requirement to verify the right to rent in England. They cover five main areas: identity verification, credit history, income and affordability, previous landlord reference, and Right to Rent status. Taken together, they are the primary risk management tool available to a self-managing landlord before a tenancy begins.

Why reference checks matter more after the Renters' Rights Act

The Renters' Rights Act 2025, in force from 1 May 2026, abolished Section 21 no-fault possession in England. Every contested possession now requires a valid statutory ground under Section 8, and court proceedings currently take an average of more than eight months from notice to possession order. This means a poor letting decision is substantially more costly to unwind than before. From working with self-managing landlords across the UK, the single most consistent finding is that landlords who are rigorous at the referencing stage face fewer arrears disputes, fewer possession proceedings, and shorter void periods. Referencing is the primary point of control.

The five components

Identity verification confirms the applicant is who they claim to be, using a passport, driving licence, or equivalent document alongside proof of current address. It also protects against tenancy fraud, which has increased as rental competition has grown.

Credit check provides a snapshot of the applicant's financial history, including missed payments, County Court Judgments (CCJs), defaults, and bankruptcies. A poor credit record does not automatically disqualify an applicant, but it informs the decision on whether to proceed and on what terms (for example, requiring a guarantor). Most referencing agencies use a soft credit search that does not affect the applicant's credit score.

Income and affordability confirms the applicant can sustain the rent. The industry standard is gross annual income of at least 30 times the monthly rent — so for a tenancy at £1,200 per month, the tenant's gross income should be at least £36,000 a year. For multiple tenants, combined income is used. Self-employed applicants require SA302 forms or accountant's letters. Benefit income, including Universal Credit, can be accepted where it can be verified, often via Open Banking.

Previous landlord reference asks the most recent landlord to confirm rental dates, payment record, property condition at end of tenancy, and whether they would rent to the applicant again. This is one of the most informative checks available, because it reflects actual tenancy behaviour rather than financial data. It should be verified, a Land Registry check can confirm the referee actually owns the property.

Right to Rent check is the only component of reference checks that is a statutory legal requirement in England under the Immigration Acts 2014 and 2016. It confirms the applicant has the legal right to rent in the UK, by checking original documents in person or using the government's online right to rent share code service. Failure to carry out a compliant check can result in a civil penalty of up to £20,000 per occupier for a first breach. The check applies to every adult who will occupy the property as their main home, not only the named tenant.

Referencing companies versus DIY

Most landlords use a specialist referencing company such as Homelet, Goodlord, Vouch, or NRLA Referencing to run all checks through a single service. This is faster (typically two to five working days) and generates a structured report. The cost is a business expense to the landlord, under the Tenant Fees Act 2019, landlords and agents cannot charge tenants separately for reference checks.

Landlords who prefer to run checks directly can request payslips, bank statements, a P60 or SA302, and the contact details of the applicant's employer and previous landlord, then approach each reference holder independently. This takes longer but allows more tailored questions, particularly useful for previous landlord references. August stores referencing documents, payslips, credit reports, Right to Rent records, and previous landlord references, in a single property file, keeping the pre-tenancy audit trail intact if a compliance question arises later.

When to require a guarantor

If an applicant's income falls below the 30x threshold, they have a thin or adverse credit history, or they have no previous UK rental history (such as a first-time renter or an international arrival), a guarantor may be accepted as an alternative. A guarantor agrees to meet the tenant's obligations if they default. The guarantor themselves should be referenced, typically requiring income of at least 36x the monthly rent to allow for the additional financial exposure.

For the component-level detail, what each check involves, what documents to request, how to assess a failed credit check, and when to require a guarantor, see the August definition of tenant vetting.

For the full landlord guide to tenant referencing, covering when to use a referencing agency, how to handle self-employed applicants, what to do when income is borderline, and how to interpret a referencing report, see the August guide to tenant referencing.

Frequently asked questions

Can landlords charge tenants for reference checks?

No. Under the Tenant Fees Act 2019, reference check costs are a business expense to the landlord or agent and cannot be passed to the tenant as a separate charge. Charging a tenant for referencing is a prohibited payment and can result in a civil penalty of up to £5,000 for a first offence.

What is the standard income rule for tenant referencing?

The most widely used benchmark is gross annual income of at least 30 times the monthly rent, equivalent to 2.5 times the annual rent. Some referencing providers require up to 36 times the monthly rent for higher-risk applicants. Where income falls below the threshold, a guarantor or additional evidence of savings may be accepted as an alternative.

Is a Right to Rent check legally required?

Yes, in England. The Immigration Acts 2014 and 2016 require landlords to verify that every adult occupying a rented property as their main home has the legal right to rent in the UK. The check must be completed before the tenancy starts and records must be kept for at least one year after the tenancy ends. Scotland, Wales, and Northern Ireland are not subject to the same requirement.

What happens if a tenant fails referencing?

A failed component does not automatically mean rejection, the landlord always makes the final decision. A failed credit check may be addressed by requiring a guarantor, an enhanced deposit (subject to the deposit cap under the Tenant Fees Act), or a larger initial rent payment within the permitted advance rent rules. Where the Right to Rent check fails and the applicant cannot demonstrate a legal right to rent, the landlord must not grant the tenancy.