What Tenant Referencing Checks Should Landlords Do?

Which checks make up a full tenant reference?

Six checks, each proving one thing. Identity proves who the applicant is, right to rent proves they may legally rent here, and the other four test whether they can and will pay.

The six checks and what each one proves

Read them as a set. Any one of them alone will either scare you off a good tenant or wave through a bad one.

What a credit search shows, and what it does not

Experian, Equifax and TransUnion hold six years of payment history, County Court Judgments, IVAs and bankruptcy orders. Rent itself appears only if a previous landlord reported it.

One default from a redundancy three years ago is not the same signal as four missed payments this year. Read the pattern and the dates.

The check you are not allowed to run

Letting is not a regulated activity, so you cannot obtain a standard or enhanced DBS check on a tenant. An applicant may volunteer a Basic DBS, but you cannot make one a condition of the tenancy.

How do you carry out a right to rent check correctly?

Check every adult aged 18 or over before the tenancy starts, using original documents, a Home Office share code or a certified digital verification service. Get it wrong and the penalty is £10,000 per occupier for a first breach.

The three ways to check

The gov.uk guidance on right to rent documents gives three routes: examine originals with the applicant present, view an online profile using a share code, or use a certified digital verification service.

Where permission to stay is time-limited, the check has to happen in the 28 days before the tenancy begins. Save the share code profile page or take clear copies, and record the date.

Keep those records for as long as the tenant rents from you and for one year after. That is the only retention period in referencing that is fixed by law.

Follow-up checks and what a breach costs

A follow-up check is due before time-limited permission expires. Where an occupier loses the right to rent, report it to the Home Office to keep your statutory excuse.

Penalties are set out on the gov.uk page on penalties for illegal renting and were last revised in April 2026. Pay within 21 days and a 30% discount applies.

Where the scheme does and does not apply

England only, and it covers lodgers, shared houses and HMOs, including adults who are not named on the agreement. Genuine holiday lets sit outside it, though short-term let cover is a separate question.

How should you test affordability, and what multiple do agents use?

The standard letting agent benchmark is gross annual income of at least 30 times the monthly rent, which is the same thing as 2.5 times the annual rent. Rent then takes about 40% of gross pay, and most referencing systems fail an applicant above that.

The 30x rule in real numbers

Apply the multiple to gross income and to the whole household where tenants are jointly liable. Guarantors are tested at 36 times the monthly rent, because they have to fund their own housing too.

Evidence to ask for by applicant type

• Employed: three months of payslips plus a bank statement showing the salary landing, then confirm the role and salary with the employer on a number you found yourself.
• Self-employed: two years of SA302 tax calculations or accountant-prepared accounts, read for consistency rather than one strong year.
• Retired: pension, annuity or drawdown statements, tested against the same multiple.
• Students: a UK-based guarantor, referenced to the same standard as a tenant.

Applicants on Universal Credit are assessed the same way, on total income including the housing element. DSS landlord insurance is written for that market.

When a guarantor bridges the gap

A guarantor rescues a borderline application without bending the affordability test, so reference them fully. Get the deed signed before the tenancy starts.

Say whether the guarantee covers the whole household or one tenant’s share. A vague guarantee is close to worthless when you try to rely on it.

What should a previous landlord reference tell you?

Whether the rent arrived on time, what condition the property was left in, and whether there was a deposit dispute. It is the only check that shows how someone behaves as a tenant rather than as a borrower.

The questions worth asking

• Was the rent paid in full and on time for the whole tenancy, and were there any arrears at any point?
• Was the property returned in the condition it was let in, allowing for fair wear and tear?
• Were there complaints from neighbours, or any breach of the tenancy terms?
• Was any of the deposit withheld, and did it go to adjudication?
• Would you let to this tenant again?

Two references beat one where the history exists. A first-time renter shifts the weight onto the credit search, income evidence and a guarantor.

How to spot a reference that is not real

The commonest referencing fraud is a friend posing as the previous landlord. It costs nothing to arrange and it defeats every automated check.

• Find the contact details yourself, from the Land Registry title for the previous address or the letting agent named on the old advert.
• Treat a mobile number and a free email address with no company footprint behind them as a prompt to dig further.
• Ask something only a real landlord knows, such as the deposit scheme used or which appliances were supplied.
• Cross-check the tenancy dates in the reference against the addresses on the credit file.

Fraud here is what turns into a declined claim later, because loss of rent cover assumes the tenant you described is the tenant you referenced.

What is your legal basis for holding applicant data?

You are a data controller the moment you collect an application form, so you need a lawful basis under Article 6 of the UK GDPR and you must delete the data once it has served its purpose. For most landlords the basis is contract for the successful applicant and legitimate interests for the rest.

Choosing your lawful basis

The ICO’s guide to lawful basis requires you to record which basis you rely on for each purpose and why. Consent is a poor fit here, because an applicant who can withdraw it at any moment is not really giving it freely.

Right to rent checks sit under legal obligation, because the Immigration Act 2014 requires them. Referencing the applicant you house sits under contract, and referencing the ones you turn down sits under legitimate interests.

The Data Protection Act 2018 runs alongside the UK GDPR and adds the conditions for special category data. A standard reference should never stray into health detail.

How long you may keep each record

The ICO’s storage limitation guidance sets no fixed periods. It asks you to write down a schedule, justify each period against the purpose, and then delete or anonymise on time.

The schedule below is a defensible starting point for a single let. Adjust a period if you have a reason, and write the reason down.

What an applicant can ask you for

Anyone you referenced can make a subject access request, free of charge, and you have one month to respond. That includes applicants you rejected.

Keep your notes factual for that reason. A written affordability calculation protects you far better than a vague recollection.

Who pays for referencing under the tenant fees act?

You do. The Tenant Fees Act 2019 makes referencing, credit checks and admin charges prohibited payments, so nothing about the screening process can be passed to the tenant.

What you can and cannot charge

Schedule 1 of the Tenant Fees Act 2019 lists the only payments you may take: rent, a tenancy deposit, a holding deposit, and payments for utilities, council tax, communications and certain defaults.

The tenancy deposit is capped at five weeks’ rent below £50,000 annual rent and six weeks at or above it. A holding deposit is capped at one week’s rent.

A first prohibited payment attracts a civil penalty of up to £5,000. A repeat within five years can reach £30,000, or prosecution with an unlimited fine.

What referencing costs a landlord

A full tenant or guarantor reference costs NRLA members £23.40, or £36.00 for the priority service. Independent providers sit in a similar £20 to £60 band.

Across four properties that is under £200 a year, less than the excess on most claims. Check how referencing standards interact with a portfolio landlord policy before renewal.

What do the 2026 discrimination rules stop you doing?

You cannot refuse, discourage or price out an applicant because they claim benefits or have children, and you cannot invite offers above the advertised rent. Assessing income is still allowed, and the Act says so in terms.

Children and benefits status

Chapter 3 of the Renters’ Rights Act 2025 prohibits practices that make families with children or benefit claimants less likely to rent. Section 41 preserves your right to take income into account when judging whether someone can afford the rent.

Local housing authorities enforce this with a penalty of up to £7,000, plus a further £7,000 where one was imposed for the same conduct in the previous five years. Screen on figures rather than categories and keep the calculation on file.

Rental bidding and the advertised rent

Section 56 makes you state a proposed rent in the advert and forbids asking for or accepting more, with its own penalty under section 57. That closes the old route of taking a weaker applicant at a higher rent.

Where affordability is tight, the lawful answer is a guarantor rather than a bidding war.

The mortgage and insurance terms that no longer bite

Sections 37 and 38 void terms in mortgages and insurance contracts requiring a landlord to exclude benefit claimants or families with children. If an old buy-to-let mortgage condition still says otherwise, it no longer has force.

Insurance terms entered into or extended after commencement are caught the same way. Check the wording at renewal rather than assuming a legacy restriction still applies.

Why does your rent guarantee insurer care how you referenced?

Because almost every rent guarantee policy makes referencing to a specified standard a condition of cover. Skip it, cut it short, or house someone who failed it, and the insurer can decline the claim you bought the policy for.

The referencing standard written into the policy

Most wordings want a full reference on every adult tenant before the tenancy starts, an affordability pass at the insurer’s multiple, and a referenced guarantor where the tenant falls short. Our landlord insurance hub sets out how insurers describe that standard.

Some insurers name the provider they will accept. Others take any reference covering identity, credit, income and previous landlord, which is why the six-check set matters.

What gets a claim declined

• No reference at all, or one dated after the tenancy start date.
• An applicant who failed affordability and was housed anyway without a guarantor.
• A guarantor named in the tenancy but never referenced or never signed up.
• An adult occupier who was never referenced or right to rent checked.
• Arrears that began before cover incepted, which no policy picks up.

Possession is a separate cost, which is what legal expenses cover is for. Both sections lean on the same paperwork when you claim.

What to Keep on File for a Claim

Keep the reference report, the affordability calculation, the signed guarantee, the right to rent record and the dated agreement in one place. An insurer asking nine months into arrears will not accept a rebuild from memory.

Tell tenants to arrange their own contents insurance for renters, because your policy never covers their belongings.