Almost half of landlords say tenant referencing has become more important following restrictions on advance rent payments, new research reveals.
The Leaders Summer 2026 Lettings Report finds 37.4% of landlords consider referencing significantly more important since the changes, with another 7.8% saying it has become slightly more important.
A further 41.7% rely on their letting agent to manage the referencing process, while 13.1% say referencing was already their primary consideration and their approach has not changed.
The findings are based on responses from 717 landlords and 860 tenants and come against a backdrop of rising levels of adverse credit among consumers.
CREDIT PRESSURE
Registry Trust figures show 1.02 million new consumer County Court Judgments were registered in England and Wales during 2025, an increase of 11.6% year-on-year and the highest annual total since 2019.
Separate research from LexisNexis Risk Solutions found 3.14 million UK adults – around 6% of the adult population – had at least one CCJ or another negative financial event recorded on their credit profile.
Under the Renters’ Rights Act, landlords can no longer demand large advance rent payments as an alternative means of managing perceived affordability or credit risks.
TENANT SELECTION
Employment status and income is now the single most important consideration when assessing an application for 40.6% of landlords surveyed by Leaders.
The referencing report supplied by a letting agent follows closely at 38.8%, putting verified financial information at the centre of almost eight in 10 landlords’ decisions.
However, the tenant findings suggest problems remain relatively uncommon, with 82% saying they have always passed referencing without difficulty.
Income is the most commonly cited reason for being refused at 4%, followed by employment type at 2.2% and credit history at 1.6%.
More than a third – 36.8% – of tenants believe rigorous referencing benefits landlords and tenants equally, while another 21% think it primarily benefits landlords but also provides some protection for tenants.
AGENT ROLE
Among landlords using professional agents, 41.7% say professional referencing delivers generally or consistently better outcomes than alternative approaches, compared with just 3.3% who believe it performs worse.
Allison Thompson (main picture, inset), Chief Lettings Officer at Leaders, part of LRG, 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.”
