Too many tenants and landlords are being let down by referencing

Sadly, tenant fraud and tenant defaults are a huge problem and instead of helping to protect landlords, some referencing agencies are still approving bad tenants who are defaulting on their rent

Not only does this type of behaviour put landlords across the UK at risk – both financially and legally – but it also leads to mistrust towards tenant referencing firms across the board.

While this is harmful to landlords, it can also have an indirect impact on how honest, fair renters are treated and – subsequently – the rental opportunities they are exposed to.

It is time the tenant referencing space was given a huge shakeup. We cannot be in a situation where landlords are left vulnerable to bad tenants, while good tenants are unable to rent the properties they want.

Invisible consumers

Currently, tenant referencing companies rely heavily on credit reports, which means ‘invisible consumers’ i.e. those without credit reports, are automatically denied – or forced to pay £1000s up upfront – while their inability to detect fraud or authentic data results in 8% defaults and 1.6% court possession claims in the private rented sector.

At Homeppl, we do things differently. We leverage Open Banking, unique fraud detection tech and behavioural analysis in every single tenant check, enabling us to approve more tenants and detect more fraudulent transactions than our competitors. We are so confident in our checks that we also provide a guarantor service to landlords and letting agents and can boast a 0% default rate.

With better referencing checks across the sector, not only can we start to solve some of these issues but we can also break down rental barriers, meaning more people have access to the properties they want.

Alexander Siedes is CEO and Founder of tenant due diligence and guarantee firm Homeppl.

Read the Neg’s guide to referencing and tech.