A key part of the tenant referencing process is determining whether an applicant can comfortability afford their rental payments in additional to all of their other monthly outgoings (utility bills, council tax, groceries, insurance etc.). It's not in the interest of the tenant, or landlord, for the tenant to over extend themselves financially as this may lead to rental arrears or even defaulting on payments. As a general rule of thumb, a tenant's income must exceed their monthly rental payment by at least a factor of thirty to satisfy our tenant reference affordability criteria.
For example, an applicant with a gross annual income of £30,000 could afford a maximum monthly rental payment of £1,000. In the case of a guarantor, the multiple increases to thirty six times since they must also be be able cover their own monthly outgoings, in addition to the applicant's monthly rental payments, if called upon to do so. Whilst other factors are taken into consideration, and some leeway permitted, these multiples are generally
considered a good starting point for calculating affordabilty. We've created the tools below to allow you to work out whether you, or your tenant, are likely to satisfy
our tenant reference affordability criteria.
Calculate whether you can afford a monthly rental amount based on your gross annual income:
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|I am a:||My gross annual income is (£):|