The type of tenant that you will end up with often depends on the type of property you are letting. The area, size, amenities, decoration and cost of your property will all play their own part in attracting particular tenants.
Discrimination and equality issues
As the landlord, you are entitled to let your property to whichever applicant you prefer. What you cannot do is refuse an applicant on the grounds of the applicant's race or ethnicity, gender, religion, sexual orientation or disability.
Landlords are identified as "service providers" and, as such, you must be careful to abide by all equality legislation. As a general rule, you must be consistent in how you treat any applicants and make sure that you do not treat any applicant differently because of their race or ethnicity, gender, religion, sexual orientation or disability.
For instance, it would be discriminatory to carry out a credit check on a non-UK national if you do not require this of a UK national. However, you can request that student applicants provide a guarantor while not requiring this of working applicants, as "employment status" is not a recognised ground for discrimination.
The easiest way to protect yourself against allegations of discrimination is to set up an application procedure which you abide by with all your lettings.
Any potential tenants need to be able to prove that they can afford the property. It is common practice for a landlord or agent to insist that potential applicants complete an application form for the property. This form will generally ask for the following information:
- employment details
- income details
- credit history
- references from a previous landlord or a character reference
You may also want to run a credit check on any applicants. If you decide to ask applicants to undergo a credit check you can ask them to pay the cost of this service. You cannot charge the applicant more than the check cost. If you are using an agent, the agent's fees for finding tenants cannot be passed on to the tenant but should be charged to you.
If an applicant is not currently employed or is on a low income, they may intend to apply for assistance with their housing costs in the form of housing benefit or universal credit. If this is the case, you may wish to find out how the tenant intends to make up any shortfall between the amount of benefit they will receive and the amount of monthly rent that they are obliged to pay. The Housing Executive publishes Local Housing Allowance rates on its website. The amount of benefit help that tenants will receive towards rent will usually be less than the full contractual monthly rent.
Tenants in receipt of benefits
There is a perception among some landlords that tenants in receipt of benefits are a higher risk than tenants who are in employment. This is a myth and each applicant should be judged on their own merits.
Tenants who receive benefit help with their housing costs can be a more secure option for landlords. Once the benefit is in payment, it is processed regularly and can be paid directly to the landlord, reducing the risk of a missed or late payment. Tenants in receipt of benefit are often looking for a long term housing solution and may stay in your property much longer than a tenant who is in paid employment.
To protect yourself and your investment, you should ensure that you have a rigid application and screening process for applicants. Make sure you obtain some sort of proof of identity from the applicants and find out exactly who will be living in the property.
Ask all interested parties to complete an application form. This form should ask for details of the applicant's income, employment details, credit history and references from previous landlords or a character reference.
You may also want to run a credit check on any applicants. If you decide to ask applicants to undergo a credit check you can ask them to pay the cost of this service. You cannot charge the applicant more than the check cost you.
Once you have received completed application forms, you must decide which applicant you would like to take on as a tenant. You are entitled to choose the person you believe is most appropriate as long as you do not discriminate on grounds of the applicant's race or ethnicity, gender, religion, sexual orientation or disability.
Think about your property type and what kind of tenant would enjoy living there. If you are letting your property to a family with young children, you should expect that there may be increased wear and tear on the internal decoration than there would be in letting to an elderly tenant. Consider the type of neighbourhood the property is in. It may not be ideal to let your property to an elderly couple if the properties surrounding them are occupied by groups of students or young people.