There are currently 1,500 Housing Associations or social landlords in the UK that are providing low-cost housing options along with local councils. Through this article, we will discuss in detail the different background checks undertaken by housing associations when offering properties to eligible candidates. We will also explore the various aspects of renting and purchasing a property from housing associations as well as analyse the differences between council housing and housing associations.

What Checks Do Housing Associations Do?

There are a number of checks that housing associations will carry out before renting out property to eligible candidates to confirm if they will prove to be good tenants. These include the following:

Right to rent: If you are not a UK citizen or a resident with unlimited right to stay in the UK, The housing association will check whether you and any other adults living with you have the “right to rent” in the UK. This means that you will need to provide them with a copy of your passport or immigration documents.

Reference checks: You will be asked to provide letters of reference from your current and previous landlord(s) (if any) who can confirm that you will be a good tenant. You will also have to provide a letter of reference from your employer.

Financial information: You will need to provide recent bank statements to provide proof of your income. If you are self-employed, you will have to provide copies of statements of your trading account and an accountant’s reference.

Guarantor: If you have not rented before, you will have to provide the name and details of a guarantor. This is someone (usually from your family) who guarantees to pay rent on your behalf if you are unable to pay your rent on time. 

Credit checks: If you have had problems in paying your bills in the past, you will be asked to provide permission if credit checks can be carried out to assess your credit history. Sometimes housing associations avoid credit checks as it can be time-consuming.

However, in case you have been living in any of the following, you will not be required to provide the right to rent:

  • accommodation provided by the council or social housing
  • accommodation provided by an employer (usually as part of the job or training)
  • accommodation with a lease of 7 or more years
  • care home, hospital or hospice
  • hostel or refuge
  • student accommodation, such as halls of residence

In case your background check revelas any of the following situations, the housing assoication may refuse your application:

  • you owe rent to a housing association, the council or a private landlord
  • there is evidence of nuisance or annoyance to neighbours
  • an offence committed in the previous accommodation (this may include causing damage to property, selling drugs, robbery in a neighbour’s house)
  • conviction or a caution for an offence 
  • court action taken with regards to tenancy eviction within the previous 2 years 

What Are Housing Associations?

Housing associations are non-profit landlords providing low-cost social housing options to nearly six million individuals. They are responsible for building nearly 25 per cent of new council homes in England. 

The rights of housing association tenants may vary depending upon the nature and scope of their tenancies as well as the number of years that they have spent as a housing association tenant. 

In addition to providing affordable housing, these associations also run a number of important services such as hostels for the homeless, refuge centres for victims of domestic abuse, community centres, vocational training and apprenticeship programs.

Can A Housing Association Tenant Buy A Property To Rent Out?

Yes, a housing association tenant can buy a property to rent it out; however, if you intend to sell it before the end of a five-year term post-purchase, you may have to repay the discount you gained during the purchase through the Right to Acquire scheme.

As an assured tenant, you can purchase your housing association property under the Right to Acquire scheme by filling out the  Right to Acquire Application Form. To be eligible, you must spend at least three years as a council house tenant and fulfil all the eligibility criteria that apply to local council tenants. However, you should not have previously applied under the Right To Buy or Preserved Right To Buy schemes.

If you have applied under the Right To Acquire scheme, you will be able to get a discount of around £9,000 to £16,000 on the price of your property; depending upon where you live in the UK. This discount may reduce if you have previously applied for under a Right To Buy or Right To Acquire scheme. 

However, if any of the conditions take place, you may lose your eligibility from the Right to Acquire scheme to purchase housing association property:

  • you are facing bankruptcy 
  • you’ve received a court order for eviction 
  • being a council tenant, you can avail of the Right to Buy Scheme 
  • you have the option of using the Preserved Right to Buy Scheme

What Is The Right To Acquire Scheme?

The Right to Acquire scheme allows housing association tenants with an Assured Tenancy contract to purchase their housing association property on discounted terms. Although the size of the discount may not be the same as Secured Tenants avail while purchasing a council property; however, it is significant enough for those looking to purchase property at lower rates than the market prices. 

Other conditions include the following:

What Are The Types Of Tenancies Under The Housing Association?

Housing association tenancies include the following:

  • Starter Tenancy: This is generally known as the trial period tenancy which is offered to new housing tenants as the period of tenancy is usually 12 months. Upon completion of the trial period, they are offered an assured or fixed-term tenancy agreement.
  • Assured Tenancy: On successful completion of your Starter Tenancy you may be offered an Assured Tenancy contract with the housing association landlord. In this case, you can continue living in the property that you are currently in, for as long as you wish to.
  • Fixed Term Tenancy: This is a tenancy under a fixed term of usually 5 years. The term of the tenancy is subject to renewal at the discretion of the housing association landlord.

Both Assured and Fixed Term tenancies allow tenants to purchase the property that they are living in, have home repairs done on the premises, as well as swap their house with another council housing tenant under mutual exchange.

What Is The Difference Between Council Housing And Housing Association?

While both council housing and housing associations aim to provide low cost (as compared to the private real estate market) homes for individuals on a low income, there are some differences between the two.

Firstly, each of them offers different types of tenancies. However, both of them allow tenants to purchase the properties that they rent (under specific schemes and conditions).

Secondly, council homes are usually offered at a 50 per cent reduced rate as compared to privately rented homes. However, housing associations offer homes at a discounted rate of 80 per cent. Therefore, council homes prove to be much more affordable for residents.

How Can I Get A Council House?

According to an article titled How To Get A Council House Quicker: Our Top Tips And Tricks | PPO even after a claimant’s council housing application is accepted, it may take anywhere between 12 to 16 months to find a 2-bed council house and between 36 to 70 months to get a 4-bed house.

During this time, claimants remain on a waiting list and are informed as and when a suitable property becomes available for them. In case there is a change in their circumstances, claimants must inform their local council authorities of this.

Generally, each council has their own rules for the provision of council homes. This is called an “allocation scheme”; according to which applicants’ eligibility criteria and priorities are assigned.

However, as a basic rule, anyone who is above 18 years of age, low on income and savings can apply for council housing. Some councils also require a “local connection” of the applicant. This means that either they have lived in the vicinity for a number of years or they have a family or job in the area.

If someone’s council housing application is based on medical grounds (applicant’s personal condition or of an immediate family member) whether due to health reasons or disability, they are on a priority list for council housing and will be considered much earlier than others.

Can Applicants Choose Their Own Homes?

Applicants will need to check with their local councils whether a place of residence will be chosen and assigned by the council or the residents be given the option to choose. In the case of the latter, once the application is approved, the local council may share an online platform where the process of “bidding” takes place.

If a candidate finds a suitable home and prefers it as their residence, they may inform the council of their intent by applying for it online. This is called “bidding”. The council may then direct them on how to proceed with the next steps in the bidding process.

Conclusion:

Through this article, we have come to learn about the various checks that housing associations undertake regarding potential tenants to make sure that there are no problems in the future. These checks include an overview of their tenancy history with a reference letter required from previous landlords and employees, copies of their bank statements or trading accounts as well as credit history checks. 

FAQs: What Checks Do Housing Associations Do?

How long does reference check take for renting in the UK?

As long as the candidate applying for tenancy provides all the necessary documentation, a reference check in the UK usually takes 48 hours.

What is the difference between social housing and council housing?

Although both provide low-cost housing options, the main difference between social housing and council housing is that in the case of being a social tenant, one rents a house from housing associations while council tenants rent homes from the local council. Council homes are generally more affordable than those provided by housing associations.

How do housing associations work in the UK?

Housing associations are registered as not for profit organisations in the UK that work to provide affordable housing to individuals on a low-income. The earnings made by them are reinvested into social enterprises.

Can a landlord refuse to rent to someone in the UK?

Unless classified as discrimination on any ground, a landlord can refuse to rent to someone if they deem fir to do so.

Do housing associations do credit checks?

Yes, housing associations do perform credit checks. The reason for this is to make sure that an applicant has not had trouble paying their bills in the past.

References:

Checks your landlord or letting agent will make – Citizens Advice

Private renting: Document checks – GOV.UK

Housing association homes: Apply for a home – GOV.UK

Council Housing vs Housing Association, what’s the difference? – 2022 – MovingSoon

Getting a council home

Can I Rent Out My Right To Buy Home?

Right to Acquire: buying your housing association home – GOV.UK

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.