Tenant referencing is becoming an increasingly important part of the letting process as landlords face restrictions on advance rent payments alongside a rise in County Court Judgements (CCJs).
That is according to lettings agency Leaders, which surveyed 717 landlords and 860 tenants as part of its latest research.
The agency says the financial environment has become more challenging, making thorough checks on prospective tenants increasingly important for landlords.
CCJs Reach Highest Level Since 2019
Data from Registry Trust shows that almost 1.02 million new consumer CCJs were registered in England and Wales during 2025.
That represents an 11.6% increase compared with the previous year and is the highest annual figure recorded since 2019.
Separate research from LexisNexis Risk Solutions found that around 3.14 million UK adults, equivalent to 6% of the adult population, have at least one CCJ or another negative financial event recorded on their credit profile.
With around 12.9 million people living in the private rented sector, Leaders says landlords are increasingly likely to come across applicants with some form of adverse credit history.
Referencing Becomes More Important
The agency says recent changes under the Renters’ Rights Act have made the referencing process even more significant.
With Section 21 abolished and advance rent limited to one month, landlords have fewer opportunities to use upfront payments as a financial safeguard against potential problems during a tenancy.
This means checking a tenant’s financial circumstances before the tenancy begins is becoming a key part of managing risk.
The Leaders survey found that 41.7% of landlords rely on their letting agent to handle tenant referencing, making professional agents the most common choice.
Among landlords who take a more active approach, 37.4% said referencing has become significantly more important since restrictions on advance rent were introduced.
A further 7.8% said it had become slightly more important.
Only 13.1% said referencing had always been their main consideration and that its importance had not changed.
Overall, the figures show that almost nine in 10 landlords either consider referencing more important than before or leave the process to a professional letting agent.
Income And Employment Top Landlord Priorities
When landlords were asked what they considered the most important factor when assessing a prospective tenant, employment status and income came first at 40.6%.
A close second was the referencing report supplied by the letting agent, selected by 38.8% of respondents.
Combined, these two factors accounted for almost 80% of responses.
Previous landlord references, credit history and personal instinct were considerably less likely to be selected as the main deciding factor.
What This Means For Landlords
The rise in CCJs highlights the importance of carrying out appropriate checks before agreeing to a tenancy.
For landlords, a detailed referencing process can provide a clearer picture of an applicant’s income, employment and financial background.
With changes to rental rules reducing the protection provided by advance rent, landlords may increasingly rely on thorough referencing and professional letting agents to assess potential risks before a tenancy starts.
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