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More landlords are becoming increasingly rigorous when it comes to assessing the financial status of their potential tenants before handing over any keys.

According to the Financial Times, property owners want to see proof of income, including bonuses, as well as highly personal information such as the value of investment and share portfolios and savings accounts. Lettings agents, on the behest of the landlords, are demanding piles of paperwork for every tenant they deal with.

Knight Frank says that rather than using traditional credit checking agencies it is now conducting manual checks itself. Landlords are more distrusting of credit checks and want to see, on paper, that their tenants will be able to meet rental demands every month.

The FT reports that in some cases Knight Frank says it is having to procure an indication of the tenants’ net wealth from their banks as well as guarantees from their employers that their jobs are permanent and not under threat, and details of their anticipated bonuses. Landlords want to see the long-term potential of tenants to avoid continuous costly churn of renters.

David Mumby, head of Knight Frank’s Chelsea office told the FT: "This is a pretty radical change. We are doing much more thorough checks as putting tenants through a reference company is simply not enough any more."

As a landlord operating during a recession it's crucial to be sure that you will be receiving rent every month. So if you think that you need to check and double check your potential tenants' credential don't be afraid. This news proves that letting agents will oblige and do understand the pressures that landlords are under. The worst thing that can happen to landlord right now is a defaulting tenant – so cover your back and keep checking.

SOURCE: FT, 04/07/09

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