Tenant Referencing: What to Check and What's Unlawful to Ask

Tenant Referencing: What to Check and What's Unlawful to Ask

Landlords in England can verify identity, right to rent, income, affordability and rental history. What they cannot do is apply criteria that make benefit claimants or people with children less likely to be accepted. Sections 33 and 34 of the Renters' Rights Act 2025 make that a breach carrying up to £7,000.

This article is for general information purposes only and does not constitute legal advice. Landlords should seek independent legal advice for their specific circumstances. It describes the position in England.

What you can still check

Referencing has not been restricted in scope. Every check landlords ran before 1 May 2026 remains available.

The constraint is on criteria, not on questions. A landlord can ask an applicant about their income sources. What they cannot do is apply a rule that treats one source differently from another in a way that disadvantages benefit claimants.

Right to Rent: the one that is compulsory

Every landlord letting residential property in England must check that all adults who will occupy the property as their main home have the right to rent, under the Immigration Act 2014. This applies regardless of nationality, and applies even where a person is not named on the tenancy agreement. Our Right to Rent guide covers the three methods, the share code system and follow up checks.

Two points connect it to the referencing process.

Run it on everyone, at the same stage. Checking documents only for applicants whose names or accents suggest they may not be British is discrimination on grounds of race or nationality under the Equality Act 2010, and the Home Office code of practice on avoiding discrimination exists for that reason.

Do not use it as a filter. The check establishes whether a person has the right to rent. It is not an affordability signal, an immigration assessment, or a reason to deprioritise an applicant with a time limited right.

Affordability assessed lawfully

This is where most referencing now fails, and the failure is usually in the calculation rather than in the decision.

A landlord may decline an applicant who genuinely cannot afford the rent. The Renters' Rights Act 2025 preserves the ability to take a prospective tenant's income into account, and GOV.UK guidance confirms that landlords can turn down applicants on affordability. What the guidance also states is that benefit income must be counted in the same way as any other income.

That means Universal Credit, Personal Independence Payment, Employment and Support Allowance, State Pension and Pension Credit, Carer's Allowance, Child Benefit and Council Tax Support all count towards the income figure. An affordability model that only counts employment income is a breach even if the applicant would also have failed a correctly conducted assessment, because the prohibition attaches to the criterion rather than to the outcome.

The common income multiples are convention, not law. Requiring annual income of thirty times the monthly rent, or two and a half times the annual rent, appears in no statute. A landlord is free to set a threshold, but should be able to explain it, apply it consistently, and calculate it from all income sources.

Criteria that are now unlawful

The following are the practices most likely to attract a penalty, drawn from the prohibition in sections 33 and 34 and the examples in the GOV.UK guidance.

One asymmetry matters more than any other. The children provision in section 33 carries a defence where the conduct is a proportionate means of achieving a legitimate aim. The benefits provision in section 34 carries no such defence. A landlord with a commercial preference for employed tenants has no route to justify it. Our article on the discrimination rules for benefits and children covers the defence and the insurance exception in detail.

Who pays for referencing?

Not the tenant. The Tenant Fees Act 2019 makes any payment that is not on the permitted list a prohibited payment, and referencing fees are not permitted. A landlord or agent cannot charge an applicant for a credit check, a reference, or an administration fee dressed up as something else.

A holding deposit is permitted, capped at one week's rent, and is subject to rules on when it must be repaid. Charging a larger sum, or retaining a holding deposit outside the permitted circumstances, is enforced separately from the discrimination regime.

Note also that the traditional workaround for a weak reference has narrowed. A landlord may require no more than one month's rent in advance once the tenancy agreement is signed, and rent paid before the tenancy is entered into is a prohibited payment. The practical consequence is that a guarantee has become the main tool for supporting a borderline applicant, which is covered in our article on when guarantor agreements are enforceable.

Handling applicant data

Referencing generates a large amount of personal data about people who will mostly never become tenants, and the data protection obligations apply to all of it.

Three principles carry most of the practical weight. Collect only what the decision requires, which means a payslip or an employer reference is usually sufficient and a full set of bank statements often is not. Be clear at the outset about what will be checked and who will see it, particularly where a third party referencing provider is used. And delete the data for unsuccessful applicants once there is no reason to keep it, rather than holding a folder of rejected applications indefinitely.

The intersection with discrimination is worth noting. A landlord who keeps the referencing files for every applicant, successful or not, has created a record that could evidence either consistency or a pattern. Keeping the criteria and the calculation is useful; keeping every applicant's raw documents is a liability.

Using an agent or a referencing company

Delegating the work does not delegate the responsibility.

Section 42 of the Renters' Rights Act 2025 defines a relevant person as the prospective landlord and any person acting directly or indirectly on their behalf. The GOV.UK guidance confirms this includes referencing companies, and gives a worked example in which a referencing provider disregards benefit income and the applicant fails affordability as a result. The landlord is the one penalised.

The practical response is to give written instructions and keep them. Tell the agent or provider in writing that benefit income is to be counted in full, that the same criteria apply to every applicant, and that any guarantor requirement applies on the same terms to everyone. A landlord who can produce that instruction is in a materially different position from one relying on an assumption about how the provider works.

Ask providers directly how their affordability model treats benefit income. Several models were built around employment income and have needed reconfiguring.

Previous landlord references

A reference from a former landlord remains one of the more useful checks, and it is also one of the least reliable, for a reason worth understanding.

An outgoing landlord has an incentive to give a favourable reference for a tenant they want to leave, and no obligation to give one at all. There is no statutory right to a landlord reference and no prescribed form. A reference that arrives quickly and glowingly is not evidence of much.

Two safeguards are worth applying. Verify that the referee is actually the landlord rather than a friend, which the Land Registry title or a copy of the previous tenancy agreement will usually establish. And ask questions that produce facts rather than opinions: the dates of the tenancy, the rent, whether it was paid on time, and whether the deposit was returned in full. A factual answer can be checked; a character assessment cannot.

What a previous landlord reference must not do is import a criterion that would be unlawful if applied directly. Declining an applicant because a former landlord mentioned they claimed Universal Credit is the same breach as declining them for claiming Universal Credit.

Adverse credit history

Credit checks remain permitted with the applicant's consent, and adverse history is a legitimate consideration.

The distinction to hold on to is between financial history and benefit status. A county court judgment, a bankruptcy or a history of missed payments is information about how a person has handled credit. Receiving benefits is not. A model that treats claiming Universal Credit as an adverse marker, or that scores it alongside a CCJ, is applying a criterion that disadvantages claimants.

It is also worth being realistic about what a thin credit file means. A first time renter, a recent arrival to the UK and a person who has never borrowed will all present as having little history, and none of those is evidence of risk. That is the situation a guarantee exists to address rather than a reason to decline.

What to record

Three items, and they answer both the discrimination question and the bidding question at once.

The written criteria, dated, showing the income threshold, what counts as income, the referencing checks run, and any guarantor requirement. This is the single most useful document a landlord can hold, because consistency is only demonstrable against a stated standard.

The affordability calculation for each applicant, showing every income source counted. The point of the record is to show what was included, not what the answer was.

The reason the successful applicant was chosen, briefly. Since the rental bidding ban removed price as a tie breaker, selection now rests entirely on criteria that are open to challenge, and a one line note written at the time is worth far more than a reconstruction months later.

Referencing decisions are made in a few days and questioned months later, usually by someone asking whether the same rules were applied to everyone. LLCR keeps Right to Rent checks and tenancy level records with dates and evidence attached, so the process is documented as it happens.