Could landlords benefit from a new type of tenant reference?

Calls have been made for a new way of producing references for tenants, which could also benefit landlords.

What is a ‘referencing passport’?

The new type of reference - which has been referred to as a ‘referencing passport’ - would save tenants money as it could be transferred between letting agents.

It means tenants would not need to fork out hundreds of pounds each time they seek to rent a property.

The system could also be beneficial to landlords by highlighting how reliable a tenant has been in the past with keeping up with their rental payments.

It would be particularly effective if deposit schemes such as the Deposit Protection Service worked with referencing companies, industry insiders have suggested.

By providing the relevant information about tenants to referencing companies, such deposit schemes could help ensure landlords only get tenants with no previous history of rent arrears or withheld deposits.

Could the new type of referencing passport help with a tenant credit score?

While County Court Judgements are issued to tenants for rent arrears, the process can be a timely and costly exercise for landlords to pursue.

Some tenants know how difficult it can be for landlords to pursue them for the money owed - a situation that can be taken advantage of by rogue tenants and something that can give good tenants a bad name. It is often why landlords insist on deposits that are six to eight weeks’ worth of rental income.

However, landlords would perhaps have more peace of mind if deposit schemes could tell referencing companies if a tenant has a flawless record where deposits were repaid in full or the majority had been repaid.

At the same time, if the deposit scheme could score those tenants who’ve consistently had rent arrears or deposits withheld, then it gives landlords the option of choosing a different tenant instead.

In this way, it would work like a credit score for the private rental market.

A quicker letting process?

Another benefit of such a system is that if a reference is already in place, then the letting process could be much quicker than it would otherwise be.

Until such a system is introduced, landlord insurance can help provide landlords with a similar peace of mind to help with any potential void periods or other costs.

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