Tenant referencing is hugely important in the pre-tenancy process for landlords and letting agents - at any time and not just in the current uncertain circumstances. However, it’s come to the fore now for a number of reasons.
Protection against uncertainty
Covid-19 has given rise to unprecedented levels of uncertainty in the job market. The Office for National Statistics (ONS) has reported that the unemployment rate in the UK rose from 4.5% to 4.8% in the three months up to September, while redundancies increased to 314,000.
Agents have a responsibility to their landlords to ensure they have a robust referencing process in place, to counteract this ambiguity. Professional services can help agencies undertake more in-depth applicant checks than they may be able to tackle alone, and help to flag any risk factors.
With new financial measures in place to support tenants during the pandemic such as the furlough scheme, referencing will now need to provide a thorough check of applicants against these evolving criteria, bearing in mind any deadlines that may point to an applicant’s financial position changing further down the line.
Using new technologies can also offer an extra level of reassurance and indicate any potential issues in an application. Open banking gives an accurate overview of an applicant’s financial health, and automated ID authentication solutions can quickly check an applicant’s identity, to help catch fraudulent references before contracts are signed.
Once an applicant’s suitability for a property has been assessed, agents can choose to offer their customers some extra protection, based around the referencing criteria. Landlords now expect products such as rent protection insurance as a given, and not just a nice to have. Agents are starting to understand that having such products and services available to them at the touch of a button will give them a competitive edge - and ease the stress and time-consuming nature of serving legal notices and moving through the claims process. The reassurance that they can then offer their landlords around the payment of rent in the current circumstances can also be key to attracting, and retaining, customers.
Rent protection insurance hinges on a robust referencing service. Insurance providers need to ensure that a tenant is unlikely to need to vacate a property prematurely, before a landlord can sign up for the policy so, to make sure landlords can access a rent protection service, agents will need a strong referencing process to match.
Saving time with an efficient process
With agents busier than ever, solutions that free up valuable time, such as professional referencing services, are becoming increasingly more attractive, especially if agencies have staff on furlough or if they’re streamlining their processes.
Professional providers can pre-qualify tenants, for example, which saves time by checking an applicant will likely be successful, before getting stuck into the nitty-gritty of the official checks.
Some referencing providers have built-in, free of charge utility options too, which can be offered to applicants as an integral part of their referencing journey. These reduce the time agents spend carrying out admin tasks - up to 30 minutes per tenancy for switching utilities, for example - and also help generate revenue for agents, with commissions on utility sales.
There are a number of referencing solutions out there and it’s important to choose the one that best fits each agency’s individual needs. At Vouch, we’re receiving requests to integrate with other software solutions more frequently, to cut down on double data entry and ensure fewer administrative errors are made - which can be frustrating to the applicants, and costly for agents.
Agencies taking advantage of professional services for an accurate and streamlined approach to the referencing process are going to stand out from the crowd, while saving time and money.
Oh Goodlord Limited is an Appointed Representative of Goodlord Protect Limited for general insurance products and credit broking. Goodlord Protect Limited is directly authorised by the Financial Conduct Authority, registration number 836727. You can check this information on the Financial Services Register by visiting www.fca.org.uk/register or by telephoning 0800 111 6768 (Freephone) or 0300 500 8082 from the UK. The FCA is the independent watchdog that regulates financial services.