Q. I am looking to move out of my family home and rent my first property in the next couple of months but I have been told by a friend I could have trouble when I am referenced because I am self-employed and only have one year’s accounts. Is this true and if so are there any solutions?
A. Becoming a tenant and renting your first property can be pretty daunting at the best of times, but if you do happen to be self-employed and are unable to produce at least three years’ worth of accounts then yes – you are right, this will likely cause a few issues when your estate agent applies to one of the professional reference agencies to qualify you as a suitable tenant. The reference agencies are there to qualify you in all areas of your life, this will include checks on your current address and Landlord, a search against their tenants database to establish nothing of a detrimental nature is registered against you, and a voters roll check and finally an income check. Of course if you are employed this is a simple case of checking with your HR department to confirm proof of salary, if however you happen to be self-employed as in your case and are not able to produce the minimum of three years accounts required then there are actually two avenues that you can pursue that both provide a good solution to this issue. The first solution is for you to pay rent in advance, do bear in mind though that you can only be qualified by the referencing agency for a tenancy that is covered by the same period of advanced rent paid. So if for instance you were intending to take out a 12 month contract but could only afford to pay 6 months’ rent in advance then the contract could only run for 6 months, this of course could be extended for another 6 months when a further six months’ rent is paid. If you are unable to pay rent in advance then the second solution is using a UK based Guarantor. The guarantor will also be referenced in exactly the same way as you are and they will also be named on the rental contract, should things go wrong the guarantor would be held just as responsible for the rent as you are giving the Landlord peace of mind that the rent will be paid regardless of the current income your accounts might show. Do let your agent know right from the start that this is your situation as it will save time in the long run, as a plan can be put into place right from the onset to ensure the referencing runs smoothly and ultimately you have no unnecessary delays moving into your new home.