The Ultimate Guide to Tenant Screening for Social Housing Landlords

Highlights:

• Tenant screening for social housing is less focused on the landlord’s business risk and more on ensuring the property is right for the tenant.

• Tenant screening involves verifying certain information about a resident before you agree to rent a property to them.

• You are legally required to prove that a tenant has the right to rent a property in the UK.

• Most councils require you to prove that your tenant has lived in the area for at least five years before you can rent a property to them.

• Optional screening checks include: affordability and behavioural.

• It is extremely rare for social housing providers to reject a tenant on financial grounds. 

Tenant screening is a critical process for landlords. However, social landlords have slightly different priorities to those renting out standard properties. 

That’s because social housing landlords prioritise providing housing to people on low incomes over making financial profit.

Tenant screening for social housing is less focused on the landlord’s business risk and more on ensuring the property is right for the tenant.

This article explains what tenant screening for social housing landlords is, why it is important and what it involves. 

What Is Tenant Screening?

Tenant screening involves verifying certain information about a resident before you agree to rent a property to them. This includes:

🏠That they have the right to rent a property in the UK

🏠That the property they have applied for suits their needs

🏠That the cost of rent will not be too much for them

🏠That they don’t have a history of antisocial behaviour that is likely to continue

Usually this involves potential tenants sending documents to the landlord as proof. Examples of documents that you might ask prospective tenants to send include:

✔️Passport

✔️Bank statements

✔️References from previous landlords

✔️Proof of employment

✔️Criminal record background check

✔️Credit check

Why Is Tenant Screening Important?

Private landlords or housing associations that rent out full-priced accommodation mainly screen tenants to reduce risk to themselves. These risks include:

⚠️Loss of rental income because the prospective tenant cannot afford rent payments.

⚠️Increased costs due to damage caused by the tenant.

⚠️Loss of rental income and increased costs because the tenant moves out early if the property isn’t right for them.

However, social housing landlords have to balance these commercial concerns with their social purpose. 

Social housing associations exist to provide homes to people on low incomes. This means their tenant checks are often less stringent than those for standard property landlords. 

In 2019, one social housing landlord announced that it had stopped screening tenants for affordability altogether. 

Sanctuary Chief Executive Craig Moule said that affordability checks were stressful for applicants. He also described them as pointless bureaucracy, as the organisation never actually turned anyone down.

Mr Moule wrote in a blog on Inside Housing, “Pre-tenancy assessments can be sensible and help us work out how best we can support a tenant to sustain their tenancy, but they should never be about denying someone in need of a home.”

How tenant screening benefits residents

Tenant screening ensures that the properties residents apply to live in meet their needs. 

For example, there’s no point allocating a property to someone who cannot afford it, as it would simply put them into financial hardship or lead them to default on rent payments. 

It also ensures communities are not disrupted by introducing residents who are likely to engage in criminal activity or other antisocial behaviour.

Are Screening Checks a Legal Requirement?

As we saw in the example above, affordability checks are optional. So are checks related to the resident’s conduct. 

However, all landlords are legally required to ensure their potential tenants have a right to rent a property in the UK.

Right to Rent Checks

Under the Immigration Act 2014, it is illegal to rent a property to anyone who does not have the right to live permanently or temporarily in the UK. 

You’ll need to ask each new tenant to prove their immigration status before signing a tenancy agreement with you.

Those who can live in the UK include:

✔️British and Irish citizens

✔️People with the right to live, work and study in the UK for an indefinite period

✔️Those with humanitarian protection or refugee status

✔️People with settled or pre-settled status under the EU settlement scheme

✔️Those with permission to be in the UK, for example, via a work or student visa

✔️People with a time-limited right to rent issued by the Home Office

Valid documents to prove this include:

• A UK passport

• Two alternative documents, such as a driving licence and a birth certificate

• A passport or immigration documents showing that the individual is allowed to stay in the UK for a limited time
  

A user guide to right to rent checks can be found on the GOV.UK website. 

What to do if a resident fails a right to rent check

If a resident fails a right to rent check, you cannot rent a property to them. 

However, government guidance says that you should contact the person, explain why they failed and give them the chance to provide the correct documentation. This prevents people from being denied a property due to mistakes or misunderstandings. 

You cannot rent a property or perform another right to rent check if the person fails a second time.

Council proof of residence checks

Residents usually have to have lived within the area a council administers for at least five years before they can apply for a social housing tenancy there. This means they need to prove that they have lived within the council’s jurisdiction for the last five years.

This ensures local authorities only have to deal with their own housing needs. If this requirement wasn’t in place, people could apply for social housing anywhere in the country. 

To prove this, you will need to collect the following documentation from residents:

✔️Council tax bills

✔️Recent bank statements

✔️A letter from a child’s school confirming their address

✔️Child benefit or tax credit letters

✔️Utility bills

✔️Tenancy agreements with a previous landlord

Optional Screening Checks

Here are some optional checks for screening tenants that you may wish to conduct to ensure your residents get housing that matches their needs.

Proof of identity

The identity of the person applying for a tenancy will be proven during the right to rent check. But it’s also worth verifying the identities of anyone else living in the household.

You may wish to ask for:

• Identity documents such as a passport or driver’s licence for everyone in the household.

• Proof of legal guardianship over any children. For example, a birth certificate. 
  
  

Affordability checks

A good way to see if someone can afford a property is to see if their finances or employment allows them to pay the rent, plus other ongoing living costs.

💸Documents for proving employment:

✔️Employment contract

✔️Payslips

✔️A reference letter signed by their employer

💸Documents for proving financial standing:

✔️A P60

✔️Benefit award letters

✔️Bank statements

✔️Valuation of any assets they own

✔️Investment statements

💸Expenditure:

You may also wish to calculate whether they can afford rent and service charges, along with their usual expenditure. Consider bills like:

• Council tax

• Utilities

• Child maintenance

• Debt repayments

• Tax repayments

💸Credit checks

You can use a service like Experian to see if the resident has a good credit score. However, a low score may reflect historical issues. It doesn’t necessarily reflect their ability to afford a property. 

Behaviour screening

🔍Contacting previous landlords

One of the best ways to find out if a resident will make a good tenant is to ask them to get references from previous landlords. 

If the landlord vouches for them, it’s likely they’ll treat the property well and not upset their neighbours. Ask them to include rent receipts to prove that they pay on time. 

🔍Unspent criminal offences

You can ask the resident to submit any unspent criminal offences as part of your screening process. 

You may wish to deny a tenancy if the person has committed offences that would make them a nuisance to the community or danger in the home. Examples include:

⚠️Drunk and disorderly behaviour

⚠️Burglary

⚠️Domestic abuse

⚠️Dealing drugs

⚠️Damaging a property they previously lived in

You cannot ask someone to submit spent convictions or deny them a property based on them.

Should I Use a Tenant Screening Service?

A tenant screening service is when you outsource the tenant screening process to a third-party contractor. This is sometimes known as a tenant referencing service. These automated systems are more commonly used by more commercially driven private landlords. 

However, you may decide that it’s useful to outsource this process. The pros and cons to using a tenant referencing service are:

👍Pros

✔️Save time and resources

✔️Lower cost than doing your own screening

✔️Screen potential tenants faster

✔️Consistent approach

👎Cons:

❌Risk of errors

❌Less accountability

❌Unable to consider mitigating circumstances or make exceptions

❌Harder to prove data and financial compliance

Which Residents Should I Reject?

As mentioned above, you should reject anyone who applies for social housing who cannot prove their right to rent, or that they have lived in the area for at least five years. 

In both cases, you must give them another opportunity to provide the correct documentation. 

There are other reasons why you might reject a tenant. These are:

• They cannot afford a property

• They have unspent convictions or a history of anti-social behaviour that may continue
  
  

However, social housing associations exist to provide housing to people on low incomes. Rejecting people outright may go against their social purpose. 

Here are some tips to help you deal with residents who fail screening checks:

💡If someone fails an affordability check, try to provide a more affordable alternative.

💡If you intend to reject someone over their antisocial behaviour, you should inform them in writing and allow them to challenge your decision. Tell them that they can:

• Ask you to review your decision

• Complain to the Housing Ombudsman

• Apply for a judicial review

💡Social housing providers rarely reject any residents. Instead, screening tenants is an opportunity to understand the issues they may be facing. 

💡Most social landlords will give the benefit of the doubt to any residents who fail one or two affordability screening checks. 

💡Remember that anyone you reject will still need a home, so it’s important to direct them to another service that can help them.

Provide Better Housing with EVO

The tenant screening process is ultimately about understanding your residents’ needs and ensuring you allocate the right property to them.

This ensures happy residents and harmonious communities. 

Another way you can keep residents happy is to ensure the houses they live in are kept in good condition. 

That’s where EVO can help. Our digital platform allows you to outsource all of your repairs and maintenance. 

It improves communication between tenants, tradespeople and landlords and ensures repairs are carried out quickly and to a high standard.

The result is better-quality housing and great tenant experience. Contact us to find out how EVO can help your housing association.