MoneyWeek article: How landlords can vet their tenants

Landlords need to stop seeing large upfront rent as the only form of security. It was never a perfect test of affordability anyway. Someone can have cash today and still be financially unstable three months later.

The better approach is proper, evidence-led referencing: income checks, employment status, credit history, previous landlord references and whether the rent is genuinely affordable against the tenant’s wider commitments. A guarantor can help, but only if the guarantor is also properly assessed and understands the liability.

Landlords should also think about rent guarantee insurance, stronger communication before tenancy starts and choosing tenants based on sustainability, not just speed.

The Renters’ Rights Act will force landlords to be more professional. The safest tenant is not always the one who can throw six months’ rent upfront. It is the one whose income, behaviour and references show they can maintain the tenancy properly.

Landlords will now be very stringent when doing checks and can afford to be more selective. Rent can be paid in advance if offered- it can't be requested. Most landlords are now using guarantors and a good letting agent will be fully referencing prospective tenants. Rent Guarantee insurance is now a must and is a low cost way of protecting your rental income against most adversities.

Self-managing landlords will be the ones potentially sleep-walking into disaster as so many are inexperienced and rely on social media to find tenants and for advice- they need to ensure that they use reputable channels.

There are many industry backed resources that they can call upon but a number will still cut corners which, with the Renters Rights Act and subsequent council imposed fines, could prove costly. to avoid doubt, they should now be employing the services of a good letting agents who knows the new legislation as the buck stops with the landlord regardless.