Landlords’ vetting proceedures have lost contact with the reality of tenants’ work and financial life
Finding a flat used to be so simple. Tenants viewed a few places, selected their dream home, paid money upfront, signed the agreement and behold – the place was theirs. These days it’s much more complicated. Potential renters submit to rigorous vetting after completing reams of baffling forms.
Potential tenants must be perfect, and by perfect I mean possessing a pristine credit history without so much as one little red utility bill. They need references from previous landlords and current employers, guarantors (and tenants must pay over the odds for guarantors to be credit checked). Soon, guarantors will need guarantors, and so on ad infinitum.
This week’s Montague report recommended building lots of lovely new homes, ultimately intended for individual private landlords and large companies to rent out. Little mention was made of rent levels or security, but even less was said about who will jump the growing amount of hurdles required to live in rented homes.
Would-be tenants wade through a long and winding list of invasive questions. To start the tenancy process, they pay a holding fee and nervously submit to a list of checks: if they fail, they lose their money (along with the property). They must accept an annual rent rise, even when property values and interest rates are falling. It’s like signing a pre-nup: a friend showed me a well-known letting agent’s “pre-rent” document. When asked for a £150 holding fee, she refused due to an annual obligatory rent rise of at least 3.5%.
Supplicants must have a job. Actually, make that the right sort of job – none of this part-time work shenanigans: no part-time study, short-term contracts, portfolio career, unpaid internships or temping. Unfortunately, this is how we work now, and tenant checks are ignoring this fact.
Jump all these hurdles, and the computer might still say no. Letting agents increasingly outsource their complex, bureaucratic tenant approval checks to specialist firms. They in turn use computer protocols assessing income and outgoings to decree whether applicants can afford the rent. Tenants might find the only way to secure a place is by offering six months’ rent upfront.
A friend nearly lost a tenancy when one of those legendary computerised “affordability assessments” erroneously rejected her. The whole process of vetting was outsourced, as was the inventory check. Fortunately the agent was so infuriated with the computer programme that they abandoned the process and let the flat using old-fashioned evidence like wage slips and bank statements.
Buy-to-let is a business that involves risk. There is no guarantee of profit, and landlords house human beings, not robots. Some checks for prospective renters are reasonable, like requesting photo ID to eliminate fraudsters – although how many agents retain such information in contravention of data protection legislation?
Anyone watching BBC1’s Neighbourhood Watched, or Scotland’s The Scheme will have learned that providing rented housing requires a level of compassion, forgiveness and humour alien to most corporations and investment banks.
People are flawed and life is complicated. When wages are low and when jobs are scarce and insecure, providers need tact, understanding and, yes, actual kindness. And a computer can never say yes to common sense.