Landlords lean harder on tenant referencing
The ban on advance rental payments means landlords want more reliable tenants, says Leaders’ Allison Thompson.
Landlords are placing more importance on tenant referencing amid a rise in consumer County Court Judgements(CCJs).
Research by Leaders found almost half of landlords across England and Wales say tenant referencing has become more important since the ban on advance rent payments.
It comes as data from the Registry Trust shows almost 1.02 million new consumer CCJs were registered in England and Wales in 2025 – an 11.6% annual increase and the highest annual total since 2019.
Separate analysis by LexisNexis Risk Solutions found that 3.14 million adults – 6% of the adult population – have at least one CCJ or other negative financial event on their credit profile.
With 12.9 million people living in the private rented sector, Leaders says landlords are increasingly likely to encounter applicants with adverse credit during the referencing process.
Under the Renters’ Rights Act, with Section 21 gone and advance rent restricted to one month, landlords can no longer rely on financial buffers to manage that risk after a tenancy begins. The checks done before a tenancy starts are now their most important protection.
Referencing has moved from being one tool among many to being the most important decision a landlord makes.”
The Summer 2026 Lettings Report from Leaders shows how landlords are responding.
Some 41.7% say they rely on their letting agent to manage the referencing process – the single most common response.
Of those taking a more active view, 37.4% say referencing has become significantly more important since the advance rent ban, with a further 7.8% saying slightly more important. Only 13.1% say it was always their primary consideration and nothing has changed.
When asked to identify the single most important factor in deciding whether to accept a tenant application, employment status and income came first at 40.6%, followed closely by the referencing report provided by their letting agent at 38.8%. Together, those two responses account for nearly eight out of 10 landlords surveyed.
For tenants, the picture is more reassuring than the landlord experience might suggest. Some 82% say they have always passed referencing without issue. Of the minority who have been refused, income level is the most common reason at 4%, followed by employment type at 2.2% and credit history at 1.6%.
On the question of whether rigorous referencing works for both sides, 36.8% of tenants say it benefits landlords and tenants equally, recognising that thorough checks can prevent tenants committing to a tenancy they cannot sustain. A further 21% say it benefits landlords more but acknowledges some tenant benefit.
Only 25.9% see it purely as a landlord protection tool. Among landlords, those using professional agents are broadly positive: 41.7% say professional referencing produces generally or consistently better outcomes than other methods, with only 3.3% saying it performs worse.
Most important landlord tool
Allison Thompson, Chief Lettings Officer at Leaders part of LRG, (pictured), says: “With advance rent no longer available, referencing has moved from being one tool among many to being the most important decision a landlord makes before a tenancy begins.
“The volume of CCJs and adverse credit markers in the population is rising, and landlords are right to take the referencing process seriously.
“But the data also shows something encouraging: most tenants pass, and thorough referencing done well protects both sides.
“It confirms affordability for the tenant as much as it protects income for the landlord. That is where professional agents add real value – running a process that is rigorous, fair and documented, and that gives both sides confidence before the tenancy starts.”
