Renting a property as a contractor Renting a property as a contractor
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  1. #1

    Nervous Newbie


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    Default Renting a property as a contractor

    I have been living in the same rented property for a few years now. As the end of the tenancy is coming, I started thinking about renting elsewhere.

    Since I moved in to my current flat, I left permanent employment and started working as a contractor (ltd). I've been in business for almost a year. My financial situation is not a problem at all, and my personal Experian credit rating is excellent (995). I have personal savings as well as income accumulated in the company. However, I do not know what to expect from landlords/agencies if I decide to move flats.

    There are a few items I am concerned about. I am a director of my company, and I don't have a written employment contract. My income consists of a mixture of salary and dividends. At the time I'll be looking for a flat, I'll be out of contract - I have planned some time off.

    Has anyone been in a similar situation and can share experiences with the agencies? What attitude should I expect? No issues at all? Or just the opposite - no chance to get a new AST? Or maybe they will insist on a few months rent upfront? I have no intention to look for guarantor.

  2. #2

    Fingers like lightning


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    I wouldn't worry about it. I've rented 2 places since becoming a contractor, the first I'd been doing it less than a year.

    Just answer the referencing/credit check honestly. Say you're the owner/director of a limited company and put your gross income as whatever you take (or plan to take) in salary and dividends. Don't say you're self employed, because that generally means a sole trader. If there's no option that fits, say you're employed and your limited company as the employer.

    You'll probably be asked for your accountant's details as a reference, if so, give them a heads up so they respond promptly.

  3. #3

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    Quote Originally Posted by FrontEnder View Post
    I wouldn't worry about it. I've rented 2 places since becoming a contractor, the first I'd been doing it less than a year.

    Just answer the referencing/credit check honestly. Say you're the owner/director of a limited company and put your gross income as whatever you take (or plan to take) in salary and dividends. Don't say you're self employed, because that generally means a sole trader. If there's no option that fits, say you're employed and your limited company as the employer.

    You'll probably be asked for your accountant's details as a reference, if so, give them a heads up so they respond promptly.
    All this. You are must better bet than most so won't be a problem.

    That said where is your business registered? They won't like it if it's registered at your flat. Becomes a business premises and not a flat.
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    Quote Originally Posted by northernladuk View Post
    That said where is your business registered? They won't like it if it's registered at your flat. Becomes a business premises and not a flat.
    I've found it's not usually a problem. For most on here the business use will only be admin and/or pc-based work. Most landlords are more concerned about some kind of production facilty, lots of deliveries / collections etc
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    Quote Originally Posted by Dark Black View Post
    I've found it's not usually a problem. For most on here the business use will only be admin and/or pc-based work. Most landlords are more concerned about some kind of production facilty, lots of deliveries / collections etc
    Possibly but it's a risk to both parties. Round here properties are up for just a couple of days. I personally wouldn't have it. There will be a plenty of people so would just wait for the next one.

    IMO it's a no brainer having it registered at the accountants or something anyway so getting that done kills two birds with one stone.
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    My letting agreement said that I can't register a business address there without the permission of the landlord. I just asked and explained I'll just get post here, no goods held here and no clients will visit. They didn't have a problem with it.

    If you're worried that might put the landlord off and choose a different tennant, then wait until an appropriate point to raise it (e.g. when you get the contract), then the landlord is less likely to want to back out. Then if it is a problem, you can always register at your accountants.

  7. #7

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    Quote Originally Posted by northernladuk View Post
    That said where is your business registered? They won't like it if it's registered at your flat. Becomes a business premises and not a flat.
    Registered office is at my accountant's address. Director's service address, including address in the register of persons with significant control (as listed on Companies House website) is a separate one, not where I live. I obviously do not see clients where I live and don't do anything else than admin/coding here.

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    Quote Originally Posted by it guy View Post
    Registered office is at my accountant's address. Director's service address, including address in the register of persons with significant control (as listed on Companies House website) is a separate one, not where I live. I obviously do not see clients where I live and don't do anything else than admin/coding here.
    There you go then. Should be a walk in the park.
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    Letting agents vary. I used a popular place in London last year and they were a PITA. All they cared about was seeing last years personal income (P60 I think) and making a judgement on affordability on that alone. I did manage to secure a place but nearly gave up TBH - they didn't really deserve my money.
    Repeatedly trying to tell me I cannot afford one of their apartments was a complete joke. They even ignored the fact that my business was paying for it. They also didn't care about things like savings, the bigger picture.
    Gawd knows what they would have said this year as I only paid myself £28k last year (divi's and salary).

  10. #10

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    Quote Originally Posted by it guy View Post
    I have been living in the same rented property for a few years now. As the end of the tenancy is coming, I started thinking about renting elsewhere.

    Since I moved in to my current flat, I left permanent employment and started working as a contractor (ltd). I've been in business for almost a year. My financial situation is not a problem at all, and my personal Experian credit rating is excellent (995). I have personal savings as well as income accumulated in the company. However, I do not know what to expect from landlords/agencies if I decide to move flats.

    There are a few items I am concerned about. I am a director of my company, and I don't have a written employment contract. My income consists of a mixture of salary and dividends. At the time I'll be looking for a flat, I'll be out of contract - I have planned some time off.

    Has anyone been in a similar situation and can share experiences with the agencies? What attitude should I expect? No issues at all? Or just the opposite - no chance to get a new AST? Or maybe they will insist on a few months rent upfront? I have no intention to look for guarantor.
    I never knew it would be a problem renting as a Contractor. I have spent over £700 to Letting Agents for referencing and I have been declined. I feel scammed.

    Last year I rented a property through a Letting Agent which I will refer to as 'L'. By then I had been contracting with the same Company for two years. I have worked with this Company through my Ltd for three years now. They only give me six months contract and once it expires, they issue another one which is considered a new Contract. 'L' Compelled me to pay six months rent because they considered me a 'risky' tenant. After six months they permitted me to pay monthly and I never defaulted. Three months into the rolling tenancy they gave me a notice of possession. The reasons they gave for the Land Lady wanting possession were quite fake. I asked them to get me another property and they compelled me to pay £305 application fee - the same amount I paid when I rented through them last year. After taking my money, the declined me that I did not earn enough to afford the rent. Because I pay myself very little dividend and the rest in my Ltd account. I showed them where my earning go into my Ltd (annual gross income is 8 times the total annual rent for the property). They wanted me to pay six months rent for the new property again. I paid two other Letting Agents £200 each and they declined me because 'I did not have a permanent Job', yet when I was applying to rent, I had already informed them my employment status. So be careful the Letting Agents you deal with. Some are there to con individuals seeking to rent.

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