Tenant referencing is the process landlords use to verify that prospective tenants are who they claim to be, can afford the rent, and have a reliable rental history. While not legally required, thorough referencing is essential for protecting your investment and avoiding costly problems down the line.

This guide covers everything landlords need to know about tenant referencing in 2026, from basic credit checks to comprehensive background screening, including the legal requirements you must follow.

Why Tenant Referencing Matters

The vast majority of tenants pay rent on time and look after their homes. But when things go wrong, they can go very wrong. Rent arrears, property damage, and protracted eviction processes can cost landlords thousands of pounds and months of stress.

Proper referencing helps you:

• Verify affordability – Confirm the tenant can comfortably pay the rent
• Check rental history – Learn how they treated previous properties and landlords
• Assess reliability – Review their credit history and financial stability
• Meet insurance requirements – Most rent guarantee policies require full referencing
• Comply with the law – Right to Rent checks are a legal requirement in England

The Core Components of Tenant Referencing

A comprehensive tenant reference typically includes six key checks:

1. Identity Verification

Before anything else, confirm the applicant is who they say they are. Acceptable documents include:

• Passport – Current or expired (within 18 months for UK passports)
• Driving licence – Full or provisional UK photocard licence
• Biometric residence permit – For non-UK nationals with permission to stay
• National identity card – From an EU/EEA country (with valid status)

Check the photo matches the person in front of you, the document hasn’t been tampered with, and the details match their application. Keep copies (see GDPR section below).

2. Credit Check

A credit check reveals the applicant’s financial history and current obligations. You’ll typically see:

• County Court Judgments (CCJs) – Court orders for unpaid debts
• Individual Voluntary Arrangements (IVAs) – Formal debt repayment plans
• Bankruptcy – Current or discharged
• Payment history – Late payments on credit cards, loans, utilities
• Electoral roll registration – Confirms address history
• Credit score – Overall assessment of creditworthiness

What to look for: Recent CCJs are a significant red flag. However, a CCJ from several years ago that has been satisfied may be less concerning, particularly if the applicant can explain the circumstances. Consistent late payments suggest poor financial management, even without formal judgments.

Important: You need the applicant’s explicit consent to run a credit check. Most tenancy application forms include this consent, but ensure yours does.

3. Affordability Assessment

The standard affordability test is simple: annual income should be at least 30 times the monthly rent. For a property at £1,000 per month, the tenant needs to earn at least £30,000 per year.

Some landlords and insurers use a 2.5x multiplier (annual rent should not exceed 40% of annual income), which produces similar results.

Income sources to consider:

• Employment income (salary, wages, regular overtime)
• Self-employment income (average of last 2-3 years)
• Pension income
• Investment income (dividends, interest)
• Benefits (Universal Credit, Housing Benefit, PIP, etc.)
• Maintenance payments
• Bursaries or grants (for students)

Benefits and affordability: You should include benefits when calculating affordability. The Local Housing Allowance (LHA) element of Universal Credit is paid specifically to help with housing costs. Refusing to count benefits income could constitute indirect discrimination (see Discrimination section below).

Joint tenancies: For couples or sharers, you can combine incomes. Ensure each tenant is individually referenced and all adults will be named on the tenancy agreement.

4. Employment Verification

Contact the applicant’s employer to confirm:

• They are currently employed
• Their job title and start date
• Their salary matches what they declared
• Their employment is permanent, fixed-term, or casual
• Whether they are on probation

Many employers will only confirm basic details in writing. For more information, you may need to request a formal reference letter from HR, which can take longer.

Self-employed applicants: Request the last two or three years of accounts, tax returns (SA302), or an accountant’s reference. Bank statements showing regular income deposits can supplement this. Self-employed income can be variable, so look for consistent patterns rather than one good month.

New employees: If someone has just started a job, ask for their contract of employment showing salary, and consider requesting payslips once they’ve been paid.

5. Previous Landlord References

A reference from a previous landlord is one of the most valuable pieces of information you can get. Ask:

• How long did the tenant live at the property?
• Was rent always paid on time and in full?
• Did they keep the property in good condition?
• Were there any complaints from neighbours?
• Was the full deposit returned?
• Did they give proper notice when leaving?
• Would you rent to them again?

Watch out for: Vague or overly brief responses can indicate problems. “The tenant paid rent” is not the same as “The tenant always paid rent on time.” Ask follow-up questions if answers seem evasive.

Verify the landlord: Fraudulent references do happen. Cross-check the landlord’s details against Land Registry records if possible, or ask for proof of ownership. Be wary if the “landlord’s” phone number matches the tenant’s emergency contact, or if they’re suspiciously easy to reach and effusively positive.

Current vs previous landlord: Current landlords may give glowing references just to get rid of a problem tenant. Where possible, contact the landlord before the current one as well.

6. Right to Rent Check (Legal Requirement)

In England, landlords must verify that all tenants aged 18 or over have the right to rent residential property. This is a legal requirement, and failure to comply can result in fines of up to £3,000 per tenant or even imprisonment for repeat offenders.

You must check all adult tenants, even if they’re not named on the tenancy agreement. It is illegal to check only those you suspect may not be British citizens – this would be discrimination.

Acceptable documents include:

• UK or Irish passport (current or expired)
• Certificate of registration or naturalisation as a British citizen
• Biometric residence permit showing right to stay
• EU Settlement Scheme status (checked online)
• Valid visa or immigration status (check online via gov.uk)

For limited leave to remain: If the tenant has time-limited permission to stay in the UK, conduct the check within 28 days before the tenancy starts, and schedule a follow-up check before their leave expires.

Online checks: Many tenants, including those with EU Settlement Scheme status, can only prove their right to rent via the Home Office online service. They provide you with a share code, which you use to verify their status.

Keep copies of all documents checked, noting the date of the check. The Right to Rent Code of Practice provides detailed guidance.

When Standard References Aren’t Available

Not every applicant fits the standard mould. Here’s how to handle common situations:

First-Time Renters

Students or young people leaving the family home won’t have landlord references. Consider:

• A guarantor (usually a parent)
• Character references from employers or tutors
• Larger deposit (within the legal five-week cap)
• Evidence of savings
• University accommodation references

Returning from Abroad

Applicants who’ve been living overseas may have limited UK credit history. Request:

• References from overseas landlords (verify via video call if needed)
• Employment contract showing UK salary
• Bank statements showing savings
• A UK-based guarantor

Homeowners Becoming Renters

People selling a home to rent (perhaps due to divorce or relocation) may have no landlord references but often have excellent credit histories. Ask for:

• Mortgage payment history
• Evidence of house sale
• Employment references
• Enhanced credit check

Benefit Recipients

Applicants receiving Universal Credit or other benefits may struggle to provide traditional employment references. Accept:

• Benefit award letters showing amounts
• Bank statements showing regular payments
• Previous landlord references (particularly important)
• Support worker or social worker references where appropriate

Using a Guarantor

A guarantor agrees to pay the rent if the tenant cannot. They’re commonly used when:

• The tenant fails affordability criteria
• Credit history shows concerns
• No landlord references are available
• The tenant is a student or first-time renter

Reference the guarantor too: The guarantor should undergo the same referencing as the tenant – credit check, affordability assessment, and identity verification. A guarantor who can’t afford to cover the rent is useless.

Guarantor requirements: Most landlords require guarantors to:

• Be a UK homeowner
• Have income of at least 36x the monthly rent (higher than tenants)
• Have a clean credit history
• Not be a current tenant themselves

The guarantor agreement: This is a separate legal document that must be properly executed. The guarantor should receive independent legal advice. The agreement should specify whether they guarantee the whole tenancy or just the initial term, and whether liability continues under periodic tenancies.

Red Flags to Watch For

Referencing isn’t just about ticking boxes – it’s about spotting warning signs:

• Reluctance to provide information – Genuine tenants understand why you need to reference them
• Pressure to skip referencing – “I can pay six months upfront” is sometimes used to avoid checks
• Inconsistent information – Details that don’t match between application, documents, and references
• Gaps in rental history – Where were they living, and why can’t that landlord provide a reference?
• Overly positive references – Suspiciously glowing reviews with no specific details
• Recent CCJs or ongoing debt problems – Particularly if undisclosed
• Job-hopping or very recent employment – May indicate instability
• Can’t explain credit issues – Everyone has a story, but it should be plausible
• Deposit concerns – Asking to pay deposit in instalments or from someone else’s account

Trust your instincts. If something feels wrong, investigate further or walk away.

Discrimination: What You Must Avoid

The Equality Act 2010 prohibits discrimination in housing. You must not refuse a tenant based on:

• Race, ethnicity, or nationality
• Sex
• Disability
• Religion or belief
• Sexual orientation
• Gender reassignment
• Pregnancy and maternity

Note: Age and marital status are protected characteristics generally, but not specifically in housing. You can legally have age restrictions (e.g., over-55s housing).

Direct vs Indirect Discrimination

Direct discrimination is obvious – refusing to rent to someone because of their race or religion.

Indirect discrimination is more subtle. A policy that appears neutral but disproportionately affects a protected group may be unlawful. For example:

• “No DSS” policies – Courts have found that blanket bans on tenants receiving benefits can constitute indirect discrimination against women and disabled people, who are more likely to claim benefits
• Requiring UK-based guarantors – May indirectly discriminate against non-UK nationals
• Inflexible affordability criteria – May disadvantage those with variable incomes or non-traditional work patterns

The key is to assess each applicant individually on their ability to pay the rent and maintain the property, considering all their circumstances.

GDPR and Data Protection

Tenant referencing involves collecting and processing personal data, so you must comply with data protection law:

• Get consent – The applicant must agree to you collecting and checking their information
• Explain the purpose – Tell them what data you’re collecting and why
• Minimise data – Only collect what you actually need
• Store securely – Keep documents safe, whether physical or digital
• Retention limits – Don’t keep data longer than necessary (typically for the duration of the tenancy plus six years)
• Right to Rent copies – You are required to keep these as evidence of compliance

If you use a third-party referencing company, ensure they are GDPR compliant and have appropriate data processing agreements in place.

DIY vs Professional Referencing

You can conduct referencing yourself or use a professional service. Here’s how they compare:

DIY Referencing

Pros:

• Lower cost (credit checks from around £10-20)
• Direct contact with referees – you can ask follow-up questions
• Flexibility to adapt your approach to each applicant

Cons:

• Time-consuming
• Easier to miss red flags without experience
• Some insurers won’t accept DIY referencing
• No verification of employer/landlord authenticity

Professional Referencing

Pros:

• Comprehensive and standardised checks
• Verification of employers and landlords
• Often required for rent guarantee insurance
• Clear pass/fail outcomes
• GDPR compliance handled

Cons:

• Higher cost (typically £15-30 per applicant)
• Automated systems may miss nuance
• Less flexibility for unusual circumstances

Recommendation: For most landlords, professional referencing is worth the cost. It’s thorough, saves time, and meets insurance requirements. However, always review the results yourself rather than blindly accepting a “pass” – you’re the one who has to live with the decision.

Holding Deposits and Failed Referencing

The Tenant Fees Act 2019 allows landlords in England to take a holding deposit of up to one week’s rent. This reserves the property while referencing takes place.

You can keep the holding deposit if:

• The tenant provides false or misleading information
• The tenant fails a Right to Rent check
• The tenant withdraws from the tenancy
• The tenant fails to take reasonable steps to enter the tenancy

You must return the holding deposit if:

• You decide not to let to the applicant for any other reason
• The tenant fails referencing due to affordability criteria they couldn’t have known about
• You don’t enter into a tenancy agreement within the deadline (default 15 days)

Be clear about your referencing criteria upfront. If you use specific affordability ratios or credit requirements, state these in writing before taking a holding deposit.

What to Do When References Are Poor

Not every reference comes back clean. Here’s how to handle problems:

Have a Conversation

Give the applicant a chance to explain. People have bad years – illness, divorce, redundancy, family emergencies. A CCJ from 2020 during the pandemic may tell you very little about how they’d behave today.

Consider Mitigating Factors

• How recent are the problems?
• Have they been resolved or satisfied?
• What evidence of improvement can they show?
• Are they willing to provide a guarantor?
• Can they offer additional security (larger deposit, rent in advance)?

Know When to Walk Away

Some red flags can’t be mitigated. Active, unresolved debt problems, recent evictions, or evidence of fraud should be deal-breakers. Your gut instinct matters – if you have serious doubts, there are other tenants.

Checklist: Tenant Referencing Requirements

Use this checklist to ensure you’ve covered all bases:

Identity

• ☐ Photo ID checked (passport or driving licence)
• ☐ Photo matches applicant
• ☐ Document is genuine and unaltered
• ☐ Copy taken and dated

Right to Rent

• ☐ All adults checked (not just named tenants)
• ☐ Acceptable documents verified
• ☐ Online check completed if required
• ☐ Check done within 28 days of tenancy start
• ☐ Follow-up check scheduled if limited leave
• ☐ Records kept

Credit

• ☐ Consent obtained for credit check
• ☐ Credit check completed
• ☐ CCJs, IVAs, bankruptcy checked
• ☐ Any adverse items discussed with applicant

Affordability

• ☐ Income verified (30x monthly rent minimum)
• ☐ All income sources considered (including benefits)
• ☐ Payslips or accounts reviewed
• ☐ Bank statements checked if needed

Employment

• ☐ Employer reference obtained
• ☐ Employment status confirmed (permanent/fixed-term)
• ☐ Salary verified
• ☐ Self-employed: accounts/SA302 reviewed

Previous Landlord

• ☐ Reference requested
• ☐ Rent payment history confirmed
• ☐ Property condition discussed
• ☐ Landlord identity verified
• ☐ Second previous landlord contacted if possible

Guarantor (if required)

• ☐ Guarantor identified
• ☐ Guarantor referenced (ID, credit, affordability)
• ☐ Guarantor agreement prepared

The Bottom Line

Thorough tenant referencing takes time and effort, but it’s one of the most important things you can do to protect your investment. A few hours spent checking an applicant’s background can save months of problems and thousands of pounds in lost rent or legal fees.

Remember: referencing is not about finding the perfect tenant – they don’t exist. It’s about making an informed decision based on evidence, identifying risks you can manage, and walking away from risks you can’t.

When in doubt, reference thoroughly, trust your instincts, and don’t let the pressure to fill a void push you into a bad decision.

Related reading: Right to Rent Guide