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Renting a home whilst undergoing a trust deed

31st May 2011

A common concern for private tenants undergoing a trust deed is whether they will be able to rent a new home should it become necessary. The reason for such concern: a credit check is often part of the process the landlord relies upon to screen prospective tenants. In this article we will look at why this issue exists and what can be done to ensure private property rental remains an option.

A recent BBC report suggests that average rental rates have risen by up to 5% over the past year. This figure represents about £30 per month on the average UK rental. So on the face of it landlords seem to be doing well out of the fact that many potential buyers are unable to obtain a mortgage.

However, landlords also face an increased threat of unpaid rent and the significant costs and delays involved in evicting non-paying tenants. Tenants might be juggling multiple debts and believe themselves to be unable to maintain the payments. Nearly 12% of UK rent was unpaid or in arrears at the end of April 2011. Landlords are therefore acutely aware of their need to carefully select the right tenants. Using credit checks is one tool which helps them complete this process.

Potential tenants undergoing a trust deed may worry about their ability to rent a house or flat in such a scenario. This need not be the case; a trust deed should not prevent an individual from renting a suitable home.

The first key point is that the credit check is just one part of the application and selection process. Any individual undergoing a protected trust deed is likely to have a significantly affected credit record. Sadly there is very little which can be done to improve this until after the arrangement is finished. For that reason it’s suggested that the prospective tenant uses the credit check to display honesty to the agent or landlord. By informing them of the trust deed in advance of the credit check the prospective tenant’s openness is likely to appeal to many landlords.

Such honesty can be backed up with a description of exactly what a trust deed is and how it works. The trust deed clearly prioritises the payment of rent by making full allowance for it when the trust deed payment is calculated. Unlike most other people, a person in a trust deed does not normally have credit cards and loans to pay each month, so essentially, any individuals in a trust deed for a period of time can demonstrate their ability to manage their budget and prioritise well.

Confidence can be further strengthened with the addition of positive evidence. A reference from a previous landlord confirming a prompt payment record is of huge value to a potential landlord. Even though a trust deed demonstrates some problems with unsecured credit, a landlord’s reference demonstrates that in spite of these issues the rent was still paid as a priority.

Renting a home whilst undergoing a Scottish trust deed need not be an issue if handled properly. Honesty, explanation and evidence can all be used as methods of reassuring a landlord. Proof this tactic does work can be seen in our trust deed forum. While the question, “will I be able to rent a house while in a trust deed?” has arisen many times before, there has yet to be a forum poster complaining they have unable to do so.

For further trust deed information provided to you by industry experts and members of the public alike, please visit our trust deed forum.  

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