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  • Buy-to-Let

    Rent criteria ref: affordability

    What is the criteria to  assess whether a prospective tenant has sufficient income eg it is 2.5 times the monthly rental?

    I do use the NLA but cannot get through to them at the moment.

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    That would be a starting point - but like MMR the base salary multiple would need to be adjusted for things like children/car loans/other loans/basic household bills - all of which negatively impact disposable income.

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    You want to run a dummy budget, such as how much the house costs to run (electric/phone/gas/counciltax/etc..) and minus that along with any credit commitments they have from there income. Ensuring that there is enough left over for payment of rent and some surplus for living expenses (food for the month etc..)

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________

    Along with a credit search and / full reference - 2.5 times income is a general calc used at the start of the process for a lot of referencing companies, yes.

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    The "How to Rent" booklet includes on page 4:

    "35% of your take-home pay is the most that many people can afford, but this depends on what your other outgoings are (for example, whether you have children)."

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