The ultimate guide to tenant referencing for landlords
(Updated April 25, 2025)
Securing a great tenant for your property is fundamental to a successful and stress-free letting experience. If you've found a potential tenant and received a firm offer, the next crucial step is tenant referencing. While it might seem like just another box to tick, in today's evolving rental market, thorough referencing is more important than ever. It's estimated that around 97% of landlords undertake some form of referencing, highlighting its significance.
The rental landscape is shifting, particularly with the Renters' Rights Bill making its way through Parliament and expected to bring significant changes in late 2025 or early 2026. These changes, including the proposed abolition of Section 21 'no-fault' evictions, place even greater emphasis on making informed decisions before a tenancy begins. Robust, fair, and compliant referencing is your key strategy for mitigating risk, ensuring legal compliance, and building a positive foundation for the landlord-tenant relationship.
This guide answers key questions about tenant referencing in 2025:
What exactly does tenant referencing involve?
Why is tenant referencing critically important in the current climate?
How long does the process typically take?
What steps are involved in a comprehensive tenant reference?
What information should a good reference report provide?
What are the costs, and who is responsible for paying?
How are modern referencing approaches evolving?
What Is Tenant Referencing?
Tenant referencing is the essential process landlords and letting agents use to verify a prospective tenant's suitability and reliability for a rental property. It's about gathering and verifying key information to build an accurate picture of the applicant before committing to a tenancy agreement.
There are various levels of references available, depending on the desired level of thoroughness. Contrary to popular belief, tenant referencing isn't just credit history checks. While useful, credit checks are the most basic form of due diligence. A comprehensive process in 2025 typically involves verifying several crucial areas:
Credit History: Responsibly assessing financial standing by checking for significant adverse credit events like County Court Judgments (CCJs), bankruptcies, or insolvencies.
Employment Status: Confirming their employment details and income stability.
Affordability: Evaluating if the tenant's verified income is sufficient to comfortably cover the rent alongside their other essential living costs.
Rental History: Seeking feedback from previous landlords or agents regarding their past conduct as a tenant (e.g., payment history, property care).
Identity & Right to Rent: Confirming the applicant is who they say they are and possesses the legal right to rent in the UK. This is a mandatory check for landlords in England.
The ultimate aim is to determine, with reasonable confidence, whether the applicant is likely to pay their rent consistently, look after the property respectfully, and comply with the terms of the tenancy agreement.
Why Is Tenant Referencing Critically Important?
Protecting Finances Against Unpaid Rent
A tenant defaulting on rent is a major concern. The eviction process, should it become necessary, is not only stressful but costly and time-consuming. While costs vary, expect legal and associated fees starting from upwards of £1,500, potentially reaching £3,000 or more depending on the route (County Court vs. High Court) and case complexity. Furthermore, the average time from making a court claim to actually regaining possession is now around six months, and often significantly longer due to court backlogs and potential tenant defences. This means substantial lost rent in addition to the direct costs. Effective referencing is your best defence against rent arrears and those with a history of damaging properties or neglecting their responsibilities.
Impact of Legislative Changes
The planned abolition of Section 21 'no-fault' evictions under the Renters' Rights Bill means landlords will need to rely solely on specific grounds under a reformed Section 8 to regain possession. While legitimate grounds (like rent arrears, property sale, anti-social behaviour) will remain, the process could become more complex. This makes selecting reliable, suitable tenants from the start absolutely paramount.
Meeting Insurance Conditions
Many landlord insurance policies, particularly Rent Guarantee Insurance (RGI), stipulate that cover is only valid if the tenant has passed appropriate referencing checks.
Internal Link Suggestion: Link to Husmus Rent Guarantee Insurance page.
Ensuring Legal Compliance
Mandatory Right to Rent checks in England carry significant penalties if missed or performed incorrectly. From February 2024, fines can reach up to £10,000 per lodger and £20,000 per occupier for repeat breaches. Additionally, upcoming Financial Sanctions checks (from May 14th, 2025) add another layer of necessary compliance for landlords and agents.
Building Trust & Professionalism
A thorough, fair referencing process signals to good tenants that you are a professional and diligent landlord.
How Long Does It Take?
The time required varies depending on the level of checks and how quickly information can be gathered from the tenant and third parties like employers or previous landlords.
Basic/Instant Checks: Simple ID verification or basic credit checks can often yield results within minutes. Openrent achieves it in 24 hours.
Comprehensive Checks: A full reference involving employment and previous landlord checks typically takes 3 to 5 working days on average. However, delays aren't uncommon, especially if waiting for responses, potentially extending the process to a week or more.
Technology is helping to speed things up. Many providers now use Open Banking for faster income verification and digital platforms to chase references, making the process more efficient than it used to be.
What is the Tenant Reference process?
The process usually starts after a viewing, when an interested applicant completes a tenant application form. This form collects essential details: full name, date of birth, current address, previous addresses, employment details, income, contact information, and details of anyone else who will live at the property.
Crucially, the applicant must provide explicit written consent (usually via the application form) for you or your agent to carry out the checks and contact third parties like employers and previous landlords. Remember your GDPR obligations: only collect necessary data, process it lawfully, store it securely, and inform the tenant about the checks being done.
Here’s a breakdown of the typical verification stages:
Credit history
Purpose of a credit check
The aim is to assess the applicant's financial track record and identify potential risks related to debt management.
It's important to note that tenant credit checks do not show the same level of information as you would see if you are looking at your own credit report on platforms like clearscore and credit karma. Tenant vetting information is limited to big ticket items - County Court Judgements (CCJs) and Bankruptcies and Insolvencies; previous addresses, fraud alerts and aliases. This is the absolute basic that a tenant reference will contain.
What are CCJs?
CCJs, or County Court Judgements, are legally binding court judgments stating that debt is owed and must be repaid. A creditor who believes they are owed money that hasn't been repaid can submit a claim to the courts. If the court agrees, they'll issue a CCJ against the debtor. Unless the debt is paid in full within a month of the judgement being made, a record of it will be entered into the Register of Judgements, Order and Fines where it remains for six years (even after it has been paid in full). The record will also go into the debtors credit file and affect their ability to obtain credit in the future.
Any tenant who has been court ordered to vacate a property by a judge for not paying rent will appear on this register if the landlord makes a claim against them. The register is public information so anyone who checks the register, will be able to find out the name and address of the person who the claim is against, as well as the case number and court number, and the amount owing. Note however, that you will not be told the reason for the debt. You will need to ask the tenant about it and trust them to be honest.
Credit Check Process
Conducted (with consent) via referencing agencies using data from credit bureaus like Experian or Equifax.
How to interpret tenant credit checks
It's important to look at the context. The presence of CCJs does not necessarily mean that your tenant will be a bad one. A CCJ (debt record) from several years ago that has since been settled might be less concerning than recent, significant, or multiple issues. We encourage you to speak to prospective tenants about their financial history to understand what went wrong and if they are back on track. Many renters who fall behind on credit commitments are diligent in their rent payments.
The absence of CCJs doesn't automatically guarantee a perfect tenant, as not all disputes result in judgments. Another reason for that is that many landlords who are faced with a problem tenant choose to simply forgo the money owed in order to obtain an accelerated eviction. This means that there will be no record of the wrongdoing.
The Husmus approach to credit checks
Husmus AI has not found credit checks to be a good marker of tenant suitability. Consider that:
Around a quarter of tenants have no credit profile
Every single tenant that insurance companies have paid out on have passed at least a credit check.
Almost all landlords perform at least a credit check yet thousands of tenants default every year.
Rent behaviour history or landlord reference
The purpose of landlord references
The purpose is to determine rental behaviour. This covers if they paid their rent in full and at the agreed upon frequency as well as if they look after their homes? Naturally, only the tenant and landlord can provide insight into rental payment behaviour. However, a full account of payments can be found in bank statements.
Landlord reference process
There are two main avenues to getting this information:
Contact Landlords For Reference: Contacting the applicant's current or previous landlord/agent (with permission). Ask targeted questions (see list below) but be aware that references can sometimes be biased, so take it with a pinch of salt. This check usually takes the longest amount of time to get a response, if at all. Mainly because landlords and letting agents are busy and providing references is not a priority to them. Perhaps this is something to bear in mind the next time you are asked to provide a reference!
Bank Statements / Open Banking: Increasingly common, especially where landlord references are unavailable or slow. With tenant consent via Open Banking, referencing providers can securely view bank statements to verify rent payments being made consistently and on time. It is important to note that about half of tenants have never been asked to produce bank statements as part of the tenant referencing process and a similar number will refuse as they find it intrusive. In our experience, the more well off a tenant is, the less likely they will be willing to share bank statements directly with landlords or agents.
Questions to ask previous landlords
If you are performing the reference yourself, here are a few questions you could ask current / past landlords:
Was [tenant name] a tenant at [address]?
Are you landlord? Please confirm your name (you can confirm this with the land registry)
How long was the tenant at the property?
Was anyone else living with them?
What was the rent amount?
Did they pay rent on time?
Did they maintain the property?
Were there any damages beyond wear and tear?
Did they have pets?
Why did they leave?
Would you rent to them again?
It is also a good idea to give applicants a chance to comment on the feedback you have received, especially if issues precipitated their move. Communication is key in any landlord-tenant relationship.
The Husmus approach to rent behaviour verification
Husmus AI reviews over 500 data points including Open Banking to determine tenants reliability. Doing this ensures increased accuracy and instant results.
Income and employment verification
The purpose of income verification
There are many sources of income for a tenant: employment, self-employment, pensions, savings and independent means. Whatever the source, tenant referencing verifies the information provided by the tenant and confirms they earn sufficient income to afford the rent and living costs.
Income verification process
Thev process can change depending on the income source. Tenants provide documentation, a consent form for employer contact and details.
Contacting Employer: Phoning or emailing the HR department or line manager (with consent) to verify job title, employment status (permanent/contract), length of service, and salary. Note that responses here are standardized and while you may get to speak to someone over the phone, large companies will only respond in writing.
Documentation: Requesting recent payslips (e.g., 3 months) or an employment contract.
Self-Employed: Requesting recent tax returns (SA302 forms), accounts prepared by an accountant, or business bank statements showing consistent income.
Other Income: Verifying pensions, benefits, or savings through official documentation or bank statements.
Interpreting the results of income verification
For this part of the process, it's important that you verify a few things, including the length of time the tenant has worked for the company, what they do, the salary they make, and whether or not they are a responsible employee.
If there are any discrepancies between what the tenant has in their application compared to what their employer says, it could be a red flag. Other red flags include a fake reference, and if the employer does not speak highly of the tenant.
Questions for employers:
Can you confirm the tenant is/was employed at the company?
What is their monthly salary?
How long have they been working for the company?
What is their role?
What are the employment terms? Is there a contract in place?
Income and affordability
We are now getting to the nitty gritty. Simply, this tells you that the tenant has an income and that it is enough to cover the rent, bills and general living expenses. The latter part is very important as even if an applicant has a high income, if their living costs and debt is equally high, then they might struggle to pay the rent. It doesn't necessarily mean that the applicant will be a bad tenant, just that they may not stay in your property long. Struggling with monthly bills is not a good way to live. It is best to be realistic with them and yourself from the onset. If you are unsure, don't be afraid to ask for a guarantor.
Identity & right to rent
It is always a great idea to know exactly who you are trusting with your very expensive investment. At the very least, if something goes wrong and you have to take legal action, you should be confident in their identity.
Additionally, you must fulfil your right to rent obligations. The UK government requires that landlords act as mini immigration agents and verify an applicant's right to live in the UK which they have cleverly coined as the right to rent check. This part is not usually included in a tenant reference check but is nonetheless part of official landlord obligations. Unfortunately, this means that you have to keep up to date with legislation. Failing to do so will lead to hefty fines and possible jail sentences.
It is important that while performing a right to rent check, you do not fall foul to discrimination laws. This means that you should not dismiss tenants that you perceive may be foreign for any reason. Data shows that migrants are the best tenants in terms of paying rent, keeping up the property's standard and duration of tenancy. So, don't miss out on this group of applicants.
Husmus users get this verification done as part of their Pro tenant reference package. We check photographic identification documents (passports, biometric identity cards) from more than 190 countries for authenticity, meaning you do not have to worry about being misled.
What Does A Tenant Reference Report Contain?
A comprehensive tenant reference will verify:
credit history
rent payment history
income
affordability
identity & right to rent
How Much Does It Cost And Who Pays?
Reference checks vary in costs depending on the level of search. Expect to pay from £8 for a basic search and between £20 - £140 for a comprehensive search. Remember that in accordance with the tenancy fee act landlords can no longer pass these costs on to tenants. It is possible for you to complete tenant referencing checks yourself but it can be time-consuming; and it's much easier and safer to have an experienced company complete these tasks. Check out No letting go’s blog for a great list of the best tenant referencing companies.
Husmus Tenant Assessments: A Modern Approach
Tenant selection shouldn’t be a guessing game. Our advanced assessment system goes beyond traditional credit checks, giving you a complete, accurate picture of your applicants. We evaluate a wide range of factors to help you make informed decisions, minimizing risk while ensuring a fair process for tenants. Read more about our Tenant Assessments.
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