Referencing Criteria
Criteria required for each income type on a reference –
Employed Income
An employment reference is always requested in the first instance for an employed applicant. This is requested via a company email address and then later verified via a company landline number. Mobile numbers and generic emails (such as gmail, yahoo, outlook) are not accepted.
LegalforLandlords will complete a basic company credit check on all smaller companies to confirm that the company is active on companies’ house. Where this information cannot be located and LegalforLandlords are unable to confirm the legitimacy of the company the applicant may be acceptable with a guarantor.
A reference should be provided by;
· A line manager
· A director
· Human Resources
LegalforLandlords will check the applicant’s salary, contract type and employment term (if applicable).
LegalforLandlords will accept applicants on a zero-hours contract, providing they can provide sufficient proof of a consistent income for the preceding six months, showing that they meet the required affordability. Otherwise, they will require a guarantor to be approved.
If an employment reference cannot be obtained, the applicant will be required to submit two of the following:
· An open banking check
· Signed contract – This should be in PDF format, reflect the applicants name and must show how much is going to be earned annually (annual income or should state the minimum required hours and the hourly pay rate)
· Three months bank statements – These must show the employment income coming into the account, must be from the most recent 3 months, should be in PDF format and reflect the applicant’s name
· Three months’ pay slips – These should be in PDF format, show each month’s earnings, must include the applicant’s national insurance number, name and tax code
Future Employment Income
When an applicant is moving to the UK for employment or changing employment during the moving process LegalforLandlords will be required to complete a future employment check.
LegalforLandlords will request and assess a signed copy of the new contract of employment.
The applicant must start employment before the end of month one of the tenancy and this must be verified by the future employer. If the applicant’s future employment does not meet this condition, then they could be accepted with a guarantor.
Self-Employed Income
A self-employed applicant must have been self-employed for a minimum of 12 months for their income to be reviewed.
LegalforLandlords will look to assess either:
· The last six months personal bank statements in PDF format
· The last year’s tax return (only the net profit amount and any dividends will be accepted), and this should be submitted with a copy of the HMRC Submission Receipt reflecting the applicants IR mark, both in PDF format
· Accounts reference - An accountant’s reference will be requested by Legalforlandlords to confirm last year’s earnings
Retired Applicants Income - Pension
When an applicant is retired, LegalforLandlords will obtain information relating to their Pension. This can be via a pension letter, P60 or 3 months most recent bank statements. If the applicant is in receipt of Pension Credit, the pension credit award will also be taken into consideration.
If the applicant has additional income such as savings, this will also be accessed and would need to be submitted on a PDF savings statement, reflecting the applicants name, going back at least 30 days and dated within the last 3 days.
Students
Majority of students will require a guarantor and must be submitted as a complete reference. Some students may pass without a guarantor subject to satisfactory savings/income being received. Sponsored students will be accepted if proof of sponsorship is received and covers the required income amount. If your applicant is in receipt of a bursary or stipend, this can be accepted subject to the bursary meeting the affordability requirements. Student loans are not accepted.
Additional Income
Applicants’ household income is based on various factors, therefore the following can also be assessed, where applicable:
Acceptable:
· Tax Credits – Working Tax Credits & Child Tax Credits only subject to full award notice – we cannot accept the Childcare Element
· Bursary & Stipend – (letter required stating dates and amounts)
· Student Sponsorship – (letter required from local government or embassy confirming amount received)
· Employment and support allowance (ESA) – Letter or 3 months bank statements
· Disability Living allowance (DLA) – letter or 3 months bank statements
· Carers Allowance (CA) – letter or 3 months bank statements
· Personal Independence Payment – letter or 3 months bank statements
· Child maintenance – If supported by CSA – a court order in place or 6 months bank statements
· Premium bonds – recently dated statement, showing the last 30 days transaction, funds must have been in the account for the last 30 days.
· ISA – INSTANT ACCESS – recently dated statement, showing the last 30 days transaction, funds must have been in the account for the last 30 days
· Statutory Maternity Pay – dependent on the employer’s guidelines.
· Maternity Allowance – This pays a standard weekly rate of £156.66 or 90% of your average gross weekly earnings, whichever is the smaller, to somebody who does not qualify for statutory maternity pay.
· Universal credit – basic universal credit portion only (standard allowance)
Unacceptable:
· Childcare element of tax credit
· Loans
· Stocks & Shares
· ISA – where funds are not instantly accessible
· Student loans
· Child benefit
· Housing benefit
· Overtime
Please note that:
· Bonuses can only be considered if confirmed to be guaranteed
· Commission can only be taken into consideration if the applicant has been employed 12 months or longer, and they would need to then provide 6 months’ pay slips
Independent means
If an applicant is paying the rent via independent means, LegalforLandlords will require proof of savings. This must be a recently dated statement (no more than 3 days), showing the last 30 days transaction, funds must have been in account for the last 30 days.
Only the amount shown continuously for at least 30 days can be accepted. Stocks and shares will not be accepted. The documents will need to be submitted in PDF with the applicants name on.