Landlord News

Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

Em Morley - May 3, 2017

ARLA Propertymark insists that tenant referencing must be exempt from the Government’s planned lettings fee ban.

Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

Tenant Referencing Must be Exempt from Lettings Fee Ban, Insists ARLA

In a message to member agents yesterday, the organisation’s Chief Executive, David Cox, urged: “Tenant referencing must be exempt from the ban. The reasons for this are manifold. Referencing ensures that tenants do not take on financial commitment which is unsustainable. Referencing reduces the risk of tenants falling into rent arrears, which often results in them being evicted and subject to County Court Judgements.

“This can lead to a drop in credit rating and difficulty sourcing other rental properties or making successful mortgage applications, along with difficulty sourcing low-cost credit from mainstream suppliers.”

He continued: “Quality referencing helps to reduce homelessness.

“While it is frequently said that referencing is available for a few pounds, this is not accurate. Our primary research has shown that agents list referencing as one of the single most time-consuming aspects of the role.

“Referencing is not simply a case of sending a form to a third part; it is frequently a complex process which is in part required by law (Right to Rent checks).”

Cox explained: “Referencing involves ensuring forms are completed properly, making requests to referees and guarantors, checking a tenant’s credit history, liaising with an external referencing company, collecting employment evidence and information from previous landlords, checking passports or other documentation, storing copies securely, and scheduling and carrying out follow-up checks where legally required.”

ARLA Propertymark’s research shows that letting agents take an average of eight hours to complete tenant referencing checks.

The organisation is continuing to press for an extension or suspension of the Government consultation into the proposed lettings fee ban.

It is inviting its members to give their input into the consultation response that will be submitted.

On Friday, during an interview on BBC Radio 4’s Today programme, the Housing Minister, Gavin Barwell, made it clear that the ban would go ahead.