Renting, is this normal?

[R1 Indy]

Its time to move out from my parents as I'm nearly 26 and time is getting on

My problem is i started a business 2 years ago, first year i didn't draw a salary, and last year i only drew £12K.
Things are going well now so i can increase this easily to around £20K whilst still making profit/creating reserves.

Firstly i tried to get a mortgage which not surprisingly failed due to my circumstances.

So have been looking at rental's and finally found one that meets my needs perfectly.

Only to be told after going through everything, that i will need proof of earning over 24K a year to pass the financial checks

I never thought of this, as i know i can afford it, and have £20K in the bank if things got desperate


So is this normal for letting agents?

Starting to really regret starting a business now

Perhaps i need to sack myself, have lots of kids and live the life of benefits

[MitchT]

Four things spring to mind ...

• Increase your salary to £24k, if your business can stand it.
• Increase your salary to £24k for as long as necessary to be able to provide the evidence needed to get you through the credit checks, then reduce your salary again to keep the strain off your business.
• Find someone you know with a property to rent out who'll do it directly.
• Register on spareroom.co.uk and state your requirements and why your circumstances dictate that you need to deal directly with the landlord.

[Big Pants]

I had similar issues as I hadn't paid myself sufficient salary to qualify. The solution, if you can afford it, is to pay six months rent in advance. It hurts, but it's acceptable to both landlord and agent.

[MitchT]

That's a good point too. My brother does this as he works in engineering and they seem to hire people to work on big jobs that come in and then 'let them go' again when the big job is done, so he's perpetually in and out of work. He pays his rent up front in six month blocks.

[SouthernBoy]

R1 Indy said:

Its time to move out from my parents as I'm nearly 26 and time is getting on

My problem is i started a business 2 years ago, first year i didn't draw a salary, and last year i only drew £12K.
Things are going well now so i can increase this easily to around £20K whilst still making profit/creating reserves.

Firstly i tried to get a mortgage which not surprisingly failed due to my circumstances.

So have been looking at rental's and finally found one that meets my needs perfectly.

Only to be told after going through everything, that i will need proof of earning over 24K a year to pass the financial checks

I never thought of this, as i know i can afford it, and have £20K in the bank if things got desperate


So is this normal for letting agents?

Starting to really regret starting a business now

Perhaps i need to sack myself, have lots of kids and live the life of benefits

If you've £20k in the bank, just pay 6 months rental in advance to bypass the affordability check. The LL will bite your arm off.

[R1 Indy]

Thanks guys, yes no problems with 6 months in advance to a genuine/established agent. if this is fairly normal to surpass the financial checks I'm surprised she didn't mention it when we spoke?

I will give them a call on Monday to see if its acceptable to them.

I assume this means i pay upfront 6X the monthly fee of £725 = £4350

Plus the deposit of £1100 and costs £350

So would pay £5800 upfront.

Then pay the monthly fee as normal

Then at the end of the tenancy i would get the 6 months back along with the deposit (£5450)




Regarding upping my salary, yes i could do this, but they would then want a years proof etc, so won't help me in the mean time, and if i did this i might be able to get a mortgage in a year or so anyway (the plan).

[Sarnie]

R1 Indy said:

Its time to move out from my parents as I'm nearly 26 and time is getting on

My problem is i started a business 2 years ago, first year i didn't draw a salary, and last year i only drew £12K.
Things are going well now so i can increase this easily to around £20K whilst still making profit/creating reserves.

Firstly i tried to get a mortgage which not surprisingly failed due to my circumstances.

So have been looking at rental's and finally found one that meets my needs perfectly.

Only to be told after going through everything, that i will need proof of earning over 24K a year to pass the financial checks

I never thought of this, as i know i can afford it, and have £20K in the bank if things got desperate


So is this normal for letting agents?

Starting to really regret starting a business now

Perhaps i need to sack myself, have lots of kids and live the life of benefits

Get a mortgage based on your company's profits rather than your drawings................

Edited by Sarnie on Saturday 2nd January 14:13

[oldcynic]

R1 Indy said:

Thanks guys, yes no problems with 6 months in advance to a genuine/established agent. if this is fairly normal to surpass the financial checks I'm surprised she didn't mention it when we spoke?

I will give them a call on Monday to see if its acceptable to them.

I assume this means i pay upfront 6X the monthly fee of £725 = £4350

Plus the deposit of £1100 and costs £350

So would pay £5800 upfront.

Then pay the monthly fee as normal

Then at the end of the tenancy i would get the 6 months back along with the deposit (£5450)

Can't imagine you'd need to pay upfront and monthly - pay 6 months upfront plus deposit & fees, then collect deposit on leaving after 6 months or pay another 6 months to renew.

In the meantime check out the current qualification criteria for getting a mortgage to see whether you need to be paying yourself a more substantial salary or whether they're more interested in your accounts for the last 3 years, or both.

As a permanent employee they wanted last 2 P60's and last 3 months payslips - which suits me as I've had stack of overtime/on-call in the last 4 months, and my basic is rising year on year too.

[SouthernBoy]

R1 Indy said:

Thanks guys, yes no problems with 6 months in advance to a genuine/established agent. if this is fairly normal to surpass the financial checks I'm surprised she didn't mention it when we spoke?

I will give them a call on Monday to see if its acceptable to them.

I assume this means i pay upfront 6X the monthly fee of £725 = £4350

Plus the deposit of £1100 and costs £350

So would pay £5800 upfront.

Then pay the monthly fee as normal

Then at the end of the tenancy i would get the 6 months back along with the deposit (£5450)




Regarding upping my salary, yes i could do this, but they would then want a years proof etc, so won't help me in the mean time, and if i did this i might be able to get a mortgage in a year or so anyway (the plan).

No. You pay £5,800 up front, then nothing monthly for 6 months. At that point, you could do the same again (less deposit and possibly some costs) or switch to monthly payments if you've proved yourself a reliable tenant.

[MitchT]

SouthernBoy said:

R1 Indy said:

So would pay £5800 upfront.

Then pay the monthly fee as normal

Then at the end of the tenancy i would get the 6 months back along with the deposit (£5450)

No. You pay £5,800 up front, then nothing monthly for 6 months. At that point, you could do the same again (less deposit and possibly some costs) or switch to monthly payments if you've proved yourself a reliable tenant.

Exactly. You just pay six months' rent up front and then pay nothing monthly because you've already paid your rent for the next six months. Simple! After six months, repeat.

The only other expenses are your initial deposit (one off) and any fees relating to establishing the agreement. There may or may not be a renewal fee after six months.

[R1 Indy]

Cheers guys, will try seeing if they are happy with 6 months up front.

I guess if they don't play ball with that i could offer 12 months, but i would rather not!

[33q]

As a landlord I've accepted 6 months up front and renewed again at 6 months

[R1 Indy]

Just spoken to the letting agent, and they have refused my proposal

Said its company policy due to money laundering bks. Even refused 12 months upfront, or 12 month deposit and still pay each month. (i bet there are landlords out there who would kill for this!)

Gutted, as it was the perfect property for me

[33q]

Find out who the landlord is and contact him

Just ask around the area.....if if that perfect for you what have you bit to lose?

Just in case it doesn't come off I may shortly have a nice 2 bedroom cottage in a Notts village.....£475

Gas heating all white goods inc dishwasher included.....only roadside parking though

[Marc p]

Can your parents not offer to be a guarantor?

[R1 Indy]

33q said:

Find out who the landlord is and contact him

Just ask around the area.....if if that perfect for you what have you bit to lose?

Just in case it doesn't come off I may shortly have a nice 2 bedroom cottage in a Notts village.....£475

Gas heating all white goods inc dishwasher included.....only roadside parking though

Don't suppose there is a easy way of finding out the landlords details? (i can't see the letters giving them me)

If only you could change notts to bristol


I do have a fairly easy requirement:

Near bristol
1bed
Garage
parking for a van and S2000
nicely decorated (my OCD would go mental in some I've seen)
up to £800/Month

Hence this was perfect! http://www.rightmove.co.uk/property-to-rent/proper...

They will only accept a guarantor if only just short of their requirement.

[Sarnie]

R1 Indy said:

Just spoken to the letting agent, and they have refused my proposal

Said its company policy due to money laundering bks. Even refused 12 months upfront, or 12 month deposit and still pay each month. (i bet there are landlords out there who would kill for this!)

Gutted, as it was the perfect property for me

Income levels have ZERO to do with Anti-Money Laundering requirements.......sounds like they have just worked out their OWN affordability calculations as to what they think the minimum income needs to be for this level of rent.......

[johnwilliams77]

R1 Indy said:

Don't suppose there is a easy way of finding out the landlords details? (i can't see the letters giving them me)

If only you could change notts to bristol


I do have a fairly easy requirement:

Near bristol
1bed
Garage
parking for a van and S2000
nicely decorated (my OCD would go mental in some I've seen)
up to £800/Month

Hence this was perfect! http://www.rightmove.co.uk/property-to-rent/proper...

They will only accept a guarantor if only just short of their requirement.

Look around for a private landlord, gumtree etc. They might be more understanding to your circumstance and allow upfront payment. Probably save some cash in fees too.

[sideways sid]

OP, I suspect that the problem is that the agent isn't bright enough to understand your situation, and has simply decided that you can't afford the rental on your salary.

The obvious suggestion is to demand in writing to the agent that the agent passes your offer (6 months rent paid in advance) to the landlord.

Secondly, try to find the landlord - ask current tenants if possible, local tradespeople etc if you know any.

Thirdly, take your company accounts to the agent and explain to them that your affordability should be based on your share (100% probably) of the income of the company, not the part of it that the company pays to you as salary.

Be persistent, and remember to deter others from taking the house you want by parking your van outside it with a "Vermin Removal" / "Pest Control" / "CCTV - Peadophile Monitoring" sticker on the side!

[carreauchompeur]

Tl;dr

Most letting agents are absolute nuggets, in my experience, who like to play God over prospective tenants with all sorts of arcane restrictions. I hadn't heard about this minimum income thing though.