Tenants:

• Passed a right to rent check (where applicable)
• Provided two forms of identification of which one is photographic.
• Met affordability of 2.5x the annual rent or evidence of immediate access to savings of at least 6x their share of the rental amount, that they have held for at least the last six months.
• Clear of any outstanding or satisfied County Court Judgments (CCJ), Individual Voluntary Arrangements (IVA) or bankruptcies in the last 3 years

Any tenants that can’t meet these requirements would require a guarantor who has passed their own referencing to be accepted.

Guarantors:

• Provided two forms of identification of which one is photographic.
• Met affordability of 3x the annual rent or evidence of immediate access to savings of at least 6x their share of the rental amount, that they have held for at least the last six months.
• Clear of any outstanding or satisfied County Court Judgments (CCJ), Individual Voluntary Arrangements (IVA) or bankruptcies in the last 3 years

Affordability income for both tenants and guarantors can be achieved either fully or as a combination of the following methods:

• Gross Employment Salary – employment must be on a permanent contract or a fixed term contract that runs up to or beyond the end date of the policy.
• Pension Income
• Self-Employment Income
• State Benefits

Long standing tenants:

In the event the tenancy agreement has been in place for greater than 12 months at the inception date of this policy the above checks will not be required provided there have been no breaches of the tenancy agreement and no late payments (more than 31 days late) in the last 12 months and you are not aware of any changes in the tenant’s financial circumstances. In the event of a claim, we will require the rent schedule and proof of payments for the last 12 months showing confirmation that payments for rent have been received in accordance with the tenancy agreement.

If neither the tenants nor their guarantors meet the referencing criteria, they would not be acceptable for this policy.

Legal Documentation:

In addition to the tenant reference checks, you must also ensure that all legal documentation is in order and correct. The following documents will be requested when processing a claim:

• A copy of the signed tenancy agreement
• Up to date rent schedule
• Proof that the following documents have been issued to the tenant(s)
• How To Rent Guide
• Gas Safety Certificate (if applicable)
• Energy Performance Certificate (EPC)
• Electrical Installation Condition Report (EICR)
• Deposit Protection Certificate (if a deposit has been taken)
• Copies of correspondence that has been exchanged with the tenant(s).
• Details of prior agreements and payment plans put in place with the tenant(s)
• Copies of any notices that have been served to the tenant(s

Applicants Falling Short of Rent:

If a tenant or guarantor falls short of the monthly affordability, if they can evidence immediate access to 6x the shortfall of the monthly rent in savings for the past 6-months, they can be accepted. For example:

Rent is £1000, the tenant meets affordability for £2000 a month. This tenant would fall short by £500 of the affordability requirements. If the tenant could evidence having immediate access to at least £3000 in savings for the past 6-months, this tenant would be accepted.

Rental Splits:

Where there is more than one tenant in a property, it is common for them to have different incomes and hence their affordability would differ. If one of two tenants fall short of the affordability and are unable to obtain a guarantor these tenants would not be accepted. However, if the tenancy agreement stipulates that the tenant with higher income is responsible for a higher rental amount, and the tenant with lower income is responsible for the lower rental amount this would be acceptable on the basis that both tenants meet the affordability for their share of the rent.

For example, the total rental amount is £1000. Tenant 1’s affordability is a maximum of £1750 a month and Tenant 2’s affordability is a maximum of £750 a month, if the tenancy agreement stipulates that Tenant 1 is responsible for £700 of the rent a month and Tenant 2 is responsible for £300 of the rent a month then we can accept these tenants without the need for a guarantor as they both meet the affordability of 2.5x their share of the rent.

Increasing Rent:

We allow a 10% increase on the previous year’s rental amount without the need to re-reference the tenants on the basis that the tenants have paid in a satisfactory manner for the previous 12-months and you have not been made aware of any changes to their financial circumstances.

If you were to increase the rent by more than 10% from the previous year, you would be required to re-reference the tenants to ensure they still meet the affordability criteria. If upon re-referencing the tenants they fail to meet the new affordability requirements, a guarantor would be required for them to continue to be covered.

Company Lets:

We will only accept company let properties if the company is housing their own employees. We do not cover sub-letting.

Where the tenant is a company housing their employee(s), a company reference must be carried out showing no County Court Judgements (CCJ), bankruptcies or Company Voluntary Arrangements (CVA) and the agreed rent must not be greater than 85% of the company’s credit limit.