Referencing is the single most important safeguard a landlord has before handing over the keys. Done properly, it reduces the risk of arrears, protects against costly disputes, and gives tenants confidence that the process is fair and consistent. Done badly, or skipped altogether because a property is in high demand, it stores up problems that can take months to resolve. For landlords across Kent, where demand from commuters, families and young professionals keeps many properties letting quickly, the temptation to rush this stage is real. Resisting that temptation is one of the best decisions a landlord can make.
This guide sets out what a thorough reference check should cover, what the law says you cannot ask or do, and how to run the process so it protects both parties.
Why referencing matters more than it might seem
A tenancy is a financial and legal commitment that typically runs for a year or more. Getting it wrong is expensive. A tenant who cannot sustain the rent leads to arrears, possession proceedings, and void periods while the property is re-let. A tenant who misrepresents their circumstances can also create management headaches that have nothing to do with money, from unauthorised occupants to property damage. Referencing exists to reduce these risks before they become problems, not to catch people out after the fact.
For tenants, a properly run referencing process is also a protection. It means decisions are based on consistent, objective criteria rather than a landlord's gut feeling, and it creates a paper trail that can help resolve any future disagreement about what was agreed.
What a proper reference check should cover
A thorough check typically includes five elements. First, identity verification, confirming the applicant is who they say they are using photo identification. Second, the Right to Rent check, which is a legal requirement in England for every adult who will live in the property, regardless of nationality. Third, an affordability assessment, usually based on income evidence such as payslips or an accountant's reference for the self-employed. Fourth, a credit check, looking at County Court Judgments, prior bankruptcies or individual voluntary arrangements, and general repayment history. Fifth, references from a current or previous landlord and, where relevant, an employer.
A common affordability benchmark used by referencing agencies is that gross annual income should be at least 30 times the monthly rent, though some use an annual multiple of around two and a half times the yearly rent instead. Either way, the purpose is the same: to establish that the rent is sustainable against the applicant's income, not just technically affordable in a good month.
Previous landlord references are worth taking seriously rather than treating as a formality. Useful questions include whether rent was paid on time and in full throughout the tenancy, whether there were any complaints from neighbours, whether the property was left in good condition, and whether the previous landlord would let to the tenant again. A vague or reluctant answer can tell you as much as a detailed one.
The Right to Rent check is not optional
Every landlord letting a property in England must check that every adult occupant has the right to rent in the UK before the tenancy starts, and must keep copies of the documents checked. This applies regardless of the tenant's nationality and regardless of how well you know them. Where an occupant has time-limited permission to remain, follow-up checks must be carried out at the appropriate point to confirm their status continues. Failing to carry out these checks correctly can expose a landlord to a civil penalty, so it is worth building this step into your process as a fixed requirement rather than something done only when it feels necessary.
What you cannot ask, and why it matters
Referencing must be applied consistently and cannot be used as a vehicle for discrimination. Under the Equality Act 2010, landlords must not refuse to let, or apply different terms, based on protected characteristics including race, sex, disability, religion, sexual orientation, age, or family status. This means questions about whether an applicant is pregnant, whether they plan to have children, their religion, or their sexual orientation have no place in a referencing conversation and should never influence a decision.
A particular area of caution concerns blanket policies such as refusing all applicants who receive housing benefit or Universal Credit. Such blanket bans have been successfully challenged as indirectly discriminatory, because they disproportionately affect groups protected under the Equality Act, including women and disabled tenants. The safer and fairer approach is to assess each applicant on their individual circumstances and affordability, rather than ruling out a category of tenant before any assessment takes place.
Landlords should also be mindful of reasonable adjustments for disabled applicants during the process itself, such as allowing extra time to provide documents or accepting alternative forms of evidence where a standard requirement creates a genuine barrier.
Data protection and consent
Referencing involves collecting sensitive personal and financial information, so data protection law applies throughout. Only collect the data you actually need for the purpose of assessing the application, obtain clear consent before running credit or background checks, store the information securely, and do not keep it for longer than necessary once a decision has been made or the tenancy has ended. If you use a referencing agency, check that it has proper data handling procedures in place, since responsibility for how the information is used does not disappear once you outsource the check.
Handling adverse findings fairly
Not every applicant will pass every check cleanly, and an adverse finding does not automatically mean a refusal is the right or lawful response. A County Court Judgment from several years ago that has since been satisfied is a different proposition to a recent, unresolved one. Where affordability is marginal but not disqualifying, a guarantor can bridge the gap. Where a guarantor is used, make sure the guarantor is separately referenced for their own ability to cover the rent, and that the guarantor agreement is a properly drawn deed rather than an informal side letter.
Remember that any additional security taken to offset risk, such as a deposit, is capped under the Tenant Fees Act at five weeks' rent for annual rents under fifty thousand pounds, or six weeks above that threshold. You cannot simply demand a larger deposit to compensate for a weaker reference.
DIY versus using a referencing agency
Landlords with one or two properties can carry out reasonable checks themselves, but a specialist referencing agency brings consistency, access to credit databases, and a defensible process if a decision is ever challenged. The cost is usually modest against the risk being managed, and for landlords who let infrequently, it removes the guesswork from an area where getting it wrong is expensive.
A practical checklist
Before offering a tenancy, confirm identity and Right to Rent for every adult occupant, complete an affordability assessment against income evidence, run a credit check, obtain a landlord reference and, where appropriate, an employer reference, apply the same criteria to every applicant, and keep records of what was checked and why a decision was made. This process takes a few extra days at the start of a tenancy, but it is time well spent against the alternative of resolving problems months later.