Nearly half of landlords across England and Wales say tenant referencing has become more important since the ban on advance rent payments, according to new research from lettings agent Leaders, part of property services group LRG.
The Summer 2026 Lettings Report, which draws on responses from 717 landlords and 860 tenants, finds that removing advance rent as a financial safeguard has put referencing at the front line of how landlords manage risk, just as the credit landscape makes the task more complex.
The financial backdrop has deteriorated significantly. Registry Trust data shows almost 1.02 million new consumer County Court Judgments (CCJs) were registered in England and Wales in 2025, an 11.6% increase year on year and the highest annual total since 2019.
Separate analysis by LexisNexis Risk Solutions found 3.14 million UK adults, 6% of the adult population, have at least one CCJ or other negative financial event on their credit profile. With 12.9 million people living in the private rented sector, landlords are increasingly likely to meet applicants with adverse credit during tenant referencing.
Under the Renters' Rights Act, with Section 21 gone and advance rent restricted to one month, landlords can no longer rely on financial buffers to manage that risk once a tenancy begins. The checks done beforehand are now their most important protection.
How landlords are approaching tenant referencing
LRG, which operates 27 brands and more than 340 high street branches across the UK, surveyed landlords on how they are responding. Some 41.7% rely on their letting agent to manage the referencing process, the most common answer. Among those taking a more active view, 37.4% say referencing has become significantly more important since the advance rent ban, and a further 7.8% say it is slightly more important.
Only 13.1% say it was always their primary consideration and nothing has changed. Together, almost nine in ten landlords either regard referencing as more important than before or delegate it to a professional agent.
Asked to name the single most important factor in accepting a tenant application, landlords put employment status and income first at 40.6%, followed closely by the referencing report from their letting agent at 38.8%.
Those two answers account for nearly eight in ten landlords surveyed, while previous landlord references, credit history and gut feeling trail well behind. Leaders said the data reflects a market where verified, structured financial evidence has moved to the centre of tenant selection, with affordability checks and professional tenant referencing now the twin gatekeepers.
Tenants' experience is more reassuring than the landlord picture might suggest. Some 82% say they have always passed referencing without issue. Of the minority who have been refused, income level is the most common reason at 4%, followed by employment type at 2.2% and credit history at 1.6%.
On whether rigorous referencing works for both sides, 36.8% of tenants say it benefits landlords and tenants equally, recognising that thorough checks can stop tenants committing to a tenancy they cannot sustain. A further 21% say it benefits landlords more but acknowledge some tenant benefit, while only 25.9% see it purely as a landlord protection tool. Among landlords using professional agents, views are broadly positive: 41.7% say professional referencing produces generally or consistently better outcomes than other methods, and only 3.3% say it performs worse.
"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," commented Allison Thompson, chief lettings officer at Leaders, part of LRG (pictured).
"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."
