Affordability Criteria
In order to meet the minimum affordability for a property an applicant or joint applicants must have a provable combined annual income of more than 30 times the monthly rent.
Where a guarantor is required, the guarantor or joint guarantors must have a combined annual income of more than 36 times the monthly rent.
Where an applicant or guarantor does not have a regular provable income we can accept evidence of savings by way of their most recent bank or savings statement showing the hold more than 30 times the monthly rent is savings (36 X’s for guarantors).
We can NOT accept 12 months rent upfront as a way of bypassing the affordability criteria.
Acceptable Income Sources & Proof Required
Employed Applicants
Where Open Banking is selected, Let Alliance (our partner company in referencing) will be able to verify regular payments from the applicant’s employer. If they are unable to verify this, they will contact the employees, Line managers, Department heads or Payroll / HR department.
Let Alliance cannot take references from a personal mobile telephone or personal email address.
If the employer is unable to confirm salary, we can assess salary by viewing the applicant’s last three months’ payslips and bank statements. If the applicant cannot provide these documents Let Alliance would ask for a contract of employment to verify salary.
Temporary / Fixed Term Employment
Through Open Banking Let Alliance will gather historical data for the last 12 months showing how regular payments into the account are. If they are unable to verify regular payments, the recommendation would be for the applicant to provide a Guarantor. If the applicant does not select Open Banking, bank statements and an employment contract will be requested.
Zero Hour Contracts
Through Open Banking Let Alliance will be able to see how much is going into the account and how regularly. As zero hours vary week to week, the majority of applicants on a zero-hour contract will require a guarantor unless they have any other forms of income.
Future Employment
Let Alliance will obtain a reference from a future employer. If the future employer cannot provide a reference Let Alliance will ask for a copy of the applicant’s contract. If the future employment is subject to pre-employment checks or has no fixed start date Let Alliance will recommend a guarantor for the applicant.
Applicants Who Are Employed By A Family Business
If the applicant is employed by a family member Let Alliance will request a copy of the employment contract and the most recent three month’s payslips or bank statements to verify income. If the applicant has no employment contract Let Alliance will recommend a guarantor.
Directors Of Their Own Business
If the Applicant is the listed director of their own company, through open banking Let Alliance will be able to view regular payments into their bank account from the company. If they are unable to confirm this they may request a recent tax return
Self-Employed Applicants
In order to confirm income Let Alliance will need to have sight of one of the following: Most recent HMRC tax return OR Accountants Reference (Let Alliance will contact the accountant to confirm the applicant’s pre-tax profit for the most recent year)
Additional Rules Around Income
Child Maintenance –will be considered if this is a court ordered payment.
Fosterers Allowance –will be considered if the applicant can provide three months’ bank statements or a letter from the council confirming the income received. If Open Banking is selected and we can verify the payments this way, paper statements or a council letter will not be required.
Bonuses / Overtime / Shift Allowance / Car Allowance –We will accept bonuses/overtime/shift allowance/car allowance
Tips or Cash – We do not accept tips or cash in hand payments towards income
Maternity Leave – will be taken into consideration. We will verify payments through either Open Banking, or documentation.
Sick Leave – If an Applicant is on long term sick leave, we will ask the employer for a confirmed back to work date. If the applicant has no confirmed back to work date, they will require a guarantor.
Unemployed/ Housing Benefit Applicants
As part of the referencing process Let Alliance will ask applicants whether they have any additional income to support their application. They will seek proof to verify the amount. The following benefits can be considered towards an application – Housing Benefit, Employment and Support Allowance, Income Support, Carers Allowance, Child Benefit, Tax Credits, Guardian’s Allowance, Disability Living Allowance / Personal Independence Payment.
If Open Banking is selected, Let Alliance can verify regular benefit payments. If Open Banking is not selected, they will request copies of valid award letters or copies of the last 3 months bank statements. If the income from the benefits and other income sources does not meet the minimum required earnings or cannot be confirmed, then a guarantor will be required. Please note, where an applicant is in receipt of universal credit, the whole amount will be taken into account.
Funded / Sponsored Students
If the applicant is a sponsored student receiving a monthly living allowance, Let Alliance will obtain proof of the monthly income received from their government. If the applicant is a funded PHD student Let Alliance will obtain a reference from the University or obtain documentation from the applicant confirming the funding payment. Let Alliance will confirm income from student bursaries or grants or loans. If an applicant is a student and receiving no funding Let Alliance will recommend a guarantor
Independent Means
An applicant can use their savings as evidence of their ability to pay the rent. To be considered, the applicant will need to provide a savings statement dated within the last 30 days. The most recent balance will be taken
Retired Applicants
If an applicant is retired Let Alliance will obtain proof of the pension payments via a pension statement, a bank statement or an annual P60. Private pension, state pension and pension credits can all be taken into consideration for a retired applicant.
Applicants Who Are Moving To The UK from Overseas
Let Alliance can only verify UK based income and a landlord reference (if applicable). If an applicant is relocating to the UK for employment or beginning a new position in a future employment, Let Alliance will obtain proof of UK based income via an employment reference or a UK based employment contract. Applicants moving to the UK from abroad can use savings to prove their affordability (savings must = 30 X’s the monthly Rent) Any guarantors must have lived in the UK for 6 months or more and their UK based income must meet the minimum required earnings.
Guarantors
All guarantors must be referenced on an Ultimate Reference. Express References are not available for a guarantor. All guarantors must meet the following criteria – have a UK credit file and be based in the UK, have no adverse credit & have income or savings that are a minimum of 36 X’s the monthly rent. We cannot accept benefits as part of a guarantor’s affordability. Please note: We do not accept companies as guarantors. Any guarantor that has any form of adverse credit on their credit file will be declined.
Company References
If the applicant is a Limited Company we will assess the financial position of the company based on its last two years of trading. The company needs to have an annual profit equal to or more than three times the annual rent. The company needs to have been trading for two years or more. If the company has not been trading for two years or more, then a director of the company will need to act as a guarantor. The company should have no CCJs or bad credit history registered against them. A reference may be required from the accountant who acts on behalf of the company
