Self-Employed: Six Months Rent Upfront a Second Time?

Hi! My partner and I are coming to the end of our initial six month lease in Scotland. Since we were new to the UK, we knew we'd have to pay six months of rent upfront when we arrived to secure a property. At the time, the letting agency said we could move to monthly payments after a successful credit check when the initial lease ended.

Now, the agency is going back on their word. They say that because we're self-employed and haven't been in the UK for three years, they won't give us a credit check and we'll have to pay six months upfront again! We don't love the flat we're currently in and really don't want to get locked in again. I'm dreading the prospect years of paying rent in six month increments, with little flexibility to move, for years to come because we happen to be self-employed. I never ran into this problem in the US where I just had to show the previous years taxes for proof of income.

Do you know of any letting agencies in Scotland that won't force us to pay six months of rent at a time?

Someone else recently had this.  They pushed back and it was agreed they could go monthly.  I'll find the thread for you.

Easier than I thought!

http://talk.uk-yankee.com/index.php?topic=90335.0

Thanks for linking me to the topic; I'm glad this ended well for someone else. Unfortunately, we've already been negotiating with both our letting agent and the front office for several days, and they're refusing to budge. Our agent says they can't give us a monthly payments without a successful credit check, and the service they use won't perform the check on self-employed individuals with less than three years of UK accounts. We've asked about providing proof of our business in the US in past years as an alternative and got turned down. They say our only other option is a guarantor, but we don't have any family in the UK.

We're willing to move, but I'm concerned any new tenancy agreement with a new letting agency will also lock us into a six month lease with all money upfront.

Oh that's not cool!

I'd contact a few letting agencies and ask.  I suspect now that you have one successful tenancy under your belt you'd be okay.  But I also would have thought that you wouldn't be asked for a second lot up front!

I can't believe the landlord would rather you walk than go month-to-month.

We'll call some letting agencies and report back! We've had no problems passing other credit checks to get things like phone contracts and credit cards...

Our letting agent is somewhat sheepish about the situation. They clearly don't want us to leave, but it looks like they'd rather have us go than change credit check companies. If anything changes I'll let you know...

That's just silly!  We're both (now) self employed.  After husband became self-employed (I was full-time permanent with a company) he was required with every new property to do 6 months rent in advance even though he's the British citizen and has excellent credit.  It seemed standard practice where we looked.  After the initial 6 months was up we were able to pay monthly for the duration of that particular tenancy.

I would understand a new place charging you the 6 months in advance, but not some place you've established a relationship with and shown to be a good tenant at.

If you don't love it and you're going to have to pay 6 months in advance no matter what, call it and see if they're bluffing.  If not, you leave, leaving them to find a new tenant and hopefully you get a longer lease elsewhere so this doesn't happen again!

Can you talk to the landlord?  It's possible that he has no idea what is going on and would be mortified that those clowns are going to cost him months of lost rent because of their internal rules that only benefit themselves. 

There's always the possiblility that they want the place empty for other reasons that they won't tell you about.

An update - we've told the agency we'll have to seriously consider whether we want to move (we have about a week to give notice) given the six months upfront they require again. They're not backtracking and just say they'll await our decision. We don't have any contact information for the landlord besides his name, but I'm not certain he'd feel any differently. When we moved in he asked for a significantly higher deposit from us than the agency required because we were foreigners with no UK credit yet.

We've called a number of letting agencies, and the vast majority would require either a UK guarantor or another six months upfront for a new lease. One asked for only three months upfront, which might be doable. It also seems like some private landlords are more open to working with us and not require upfront money. I'll keep my fingers crossed.

I'm not surprised about the requirements of 6 months upfront or a guarantor for a new place.  Even with excellent credit that's what was required from us with established UK credit, a good rental history, and one of us in full time employment. 

Self-employed people are seen as a huge risk, though I have no idea why.  An employed person could be laid off quite easily whereas with making our own way we have an incredible amount of flexibility in securing work if push comes to shove.  As an example, when our landlord decided to sell and we decided not to rent any longer my husband starting calling around and securing much more work than normal, often fitting in 2 jobs per day.  I did the same with my self-employed work (I'd switched from employed to self-employed during our tenancy at our last rented flat) and together we made nearly 3x what we normally do in a month for that month.  We were exhausted but we'd reached our target for purchasing a flat by the end.

When you do this again I'd recommend looking for a longer lease and getting it in writing that after the first 6 months the rent will be due monthly.  Moving is incredibly expensive and protecting yourself is fair enough.  If they're playing hard ball and you want to fight back, check your lease regarding notice and viewings.  When our landlord sold he was a bastard and we wish we'd followed our contractual obligations rather than being nice about it.

I wanted to give an update, in case it'll help anyone else in a similar situation.

We did end up having to give notice on our flat. If we'd stayed, we would've had to continue paying six months upfront twice a year until we finally accumulated three years of UK self-employment tax returns.

Most of the letting agencies similarly wanted six months of rent upfront continually until we had at least one UK business tax return. But we found a few agencies, as well as some private landlords, that would consider our applications based on three months of UK bank statements and our US tax returns showing self-employment income in the USA in 2016.

It took a few weeks and several applications where we got passed over in favor of more traditionally employed applicants, but we finally got picked by a landlord for a property where we were the only applicants. Hooray, and what a relief!