Tenant referencing is a vital part of the lettings game. But this doesn’t mean that you have to like it. The process often takes too long, it can cost agents a bomb, and there’s more running around than an episode of Road Runner. No wonder it can drive property professionals insane.
Tenant checks are no picnic for prospective tenants either. They have to jump through more hoops than a circus lion: the frequent holdups and lack of transparency can make them feel like they’re chasing their tail.
It’s no wonder, therefore, that 47% of tenants find the tenant referencing process stressful. According to our survey of 712 recent home movers, they find it even more stressful than removals, negotiations, registering with the local council, and switching their utilities.
The tenant’s travails
Although tenants can no longer be charged for tenant referencing – the 2019 Tenant Fees Act put paid to that – that’s where the good news for tenants ends. Just think about everything they need to organise when making their application:
- Two forms of ID
- Previous landlord references
- Employment references
- Bank statements
- Residency / Right To Rent documents
- Proof of their current address
This is one heck of a list. And after all that, they may still have to print out an application form, complete it, send it off by post or email, and then subject themselves to references and the obligatory credit check. No wonder tenants find this journey awkward, confusing and overwhelming.
Not your problem?
Although some lettings agents believe that tenant toils aren’t their problem, nothing could be further from the truth. A stressed client means a stressful lettings experience. And that reflects poorly on the agency concerned.
This is why you should consider moving away from traditional tenant referencing. The referencing professional - who may or may not be skilled at multitasking – has to chase referees, review documents, and make sure that all the information checks out. This process can be prone to delays and take several days to complete. What’s more, you have to stay in touch with your referencing specialist during this process and then pay a hefty fee – around £15 or more per applicant.
As for the poor tenant, they won’t have a clue where they are in the process until the dreaded stamp of approval arrives - if it arrives. After all this hard work (for all parties) the prospective tenant might be rejected and it’s back to square one.
Give tenants a break
Digital tenant referencing solves these problems. Several aspects of the process are automated, so there’s less physical legwork, and everything is sped up so there’s less chance of irritating delays. What’s more, there’s less chasing up for the agent.
The trouble, of course, is that not all digital referencing platforms are created equal. There’s a reason why most agents still prefer using traditional referencing companies. And there’s a reason why some digital tenant checks charge as little as £3 per pop. It’s because they’re not much cop.
So what’s the solution?
The answer, of course, is to find a top-notch digital referencing platform that integrates seamlessly with your current tech. Emerging services like our own, for example, are mobile-optimised so prospective tenants can quickly submit all their supporting documents via their smartphone, 24/7.
What’s more, applicants can now do this by taking photographs of their documents and uploading them in one fell swoop: payslips, bank statements, employment contracts, the lot. Tenants can therefore kiss their photocopying, scanning, and trudging down the post office in the rain to mail their application days goodbye.
There are plenty of other advantages over traditional tenant checks too. Rather than being left in the dark, tenants can log into their account anytime to check the status of their application. Everything’s made simple. Even the digital interface itself is designed to be intuitive.
Make a good impression
Although your average lettings agent might prefer traditional tenant referencing methods right now, the future is undoubtedly digital. After all, tenants (and therefore landlords) will eventually demand it.
Agents should welcome this digital revolution. Our referencing tool, which enables agents to pre-screen candidates, conducts extensive financial checks, and includes a traffic light results system so you can quickly understand an applicant’s suitability, presents a wealth of information from an easy-to-use dashboard. And even better, it costs just £7 per reference.
Open Banking will be coming on our platform later in 2021 too. This will not only look at a prospective tenant’s income; it will also reveal their expenditure and spending habits. Meanwhile, tenants won’t have to worry about supplying payslips and bank statements anymore.
Above all, however, digital tenant referencing is another move towards a totally holistic lettings experience. After we’ve referenced a tenant, for example, we can help them move with our free Home Setup Service. Everything will be done for them. Plus, you can earn commissions when they take up services with new providers. Everybody wins.