- Yes, renting while self-employed can be harder because your income may seem riskier to landlords and letting agents.
- Tax returns, bank statements, accounts and an accountant's reference can all help prove what you earn, especially if you do not have regular monthly payslips.
- Self-employed renters may be more likely to be asked for a guarantor. If you can afford the rent but do not have someone suitable to ask, Rentmigo may be able to help.
Being self-employed should not stop you renting in the UK, but it can mean having to prove yourself a little more than somebody earning exactly the same amount through a normal salary.
The reason is simple: Most tenant referencing is built around people who have a permanent job, earn the same amount each month and have three neat payslips to prove it.
Self-employment rarely looks like that.
You might earn £6,000 one month and £3,000 the next. You might run a limited company and pay yourself a mixture of salary and dividends. You could have six regular freelance clients rather than one employer.
None of those things mean you cannot afford the rent, but they can make your finances harder to squeeze into a standard referencing form.
So you can end up in the slightly frustrating position of earning more than enough to rent a property, but still being asked for extra paperwork or a guarantor before the landlord will say yes.
If you can afford the rent but do not have someone who can act as your UK guarantor, Rentmigo may be able to help.
Why is it harder to rent when you are self-employed?
It's harder to rent when self-employed because it's more difficult for the landlord to check what you earn. If you are employed on a £50,000 salary, there is not much detective work involved. Your contract says what you earn, your payslips back it up and your employer can confirm it.
Now imagine you are a freelancer earning the same £50,000.
That money might have come from ten different clients, with £8,000 arriving in March and £2,500 arriving in April. You might have had a brilliant year but only recently started working for yourself.
In theory, you can afford exactly the same property as the person on a £50,000 salary. On paper, though, your income takes a bit more explaining.
That matters to landlords because they want to know that the rent is going to be paid every month. For many landlords, especially those with only one or two properties, a tenant falling behind with rent can be a serious financial problem. They may still have a mortgage, service charges, insurance and maintenance costs to pay regardless.
So if your income cannot be confirmed through the usual route, they may want to see more evidence before taking the risk.
What do landlords ask self-employed tenants for?
There is no single set of documents every self-employed renter will be asked to provide.
It will depend on the letting agent, the landlord and how long you have been working for yourself.
But you may be asked for:
- HMRC Self Assessment tax calculations or SA302s
- One to three years of tax returns or accounts
- Three to six months of bank statements
- Business bank statements
- An accountant's reference
- Evidence of ongoing contracts or regular client work
- Previous landlord references
- Proof of savings
- Sometimes, a guarantor
The longer you have been self-employed, the easier this tends to be.
If you have three years of accounts showing that you consistently earn enough to cover the rent, there is a clear track record for the landlord to look at.
If you started your business six months ago, that track record may not exist yet.
You might already be earning very well, but you cannot produce two years of accounts for a business that has only existed for half a year. That is often when landlords start asking for something else.
How much do you need to earn to rent when self-employed?
Self-employed tenants will usually be expected to meet the same affordability requirements as employed tenants.
A commonly used calculation is an annual household income of around 30 times the monthly rent, although different letting agents and referencing companies can use different figures.
So if the rent is £1,500 per month, an affordability check using the 30-times calculation would look for an annual income of around £45,000.
The difficulty for self-employed tenants is not always reaching that number; it is proving it in the way the referencing company wants.
If you earned £55,000 last year but your income changes from month to month, the agent may want to look at your annual taxes rather than just multiplying your latest month's earnings by 12.
If you are moving with a partner or other tenants, the agent may also be able to consider your combined household income.
Can bank statements prove self-employed income?
Bank statements can be particularly useful for self-employed renters because they show the money actually coming in. This can give a landlord a much better picture than looking at one month's income on its own.
Say you are a freelance designer.
January might bring in £3,500, February £7,000 and March £4,000. That is normal when you are being paid by different clients at different times.
Several months of bank statements make that much easier to understand. They can also show that you have money left over after your normal expenses and, if you have savings, that you have a buffer for quieter months.
Depending on how your business is set up, the agent may ask to see personal statements, business statements or both.
Why are self-employed renters more likely to need a guarantor?
Self-employed renters may be asked for a guarantor because landlords want another layer of protection when income is harder to predict or seems riskier.
A rent guarantor agrees to cover the rent if you do not pay it.
That can make a landlord much more comfortable accepting somebody who does not fit their usual referencing criteria.
You might be asked for one because:
- You have only recently become self-employed
- You cannot provide enough years of accounts
- Your income varies each month
- You have recently changed the way you work
- You fall slightly short of the agent's affordability calculation
- You are both self-employed and new to the UK
- Your referencing application cannot verify all of your income
None of this automatically makes you a bad tenant, it may just mean there is less information available for the landlord to base their decision on.
A guarantor helps fill that gap.
If you want to understand why landlords increasingly ask for this extra reassurance, read our guide to why more landlords are asking for a guarantor.
Who can be your guarantor if you are self-employed?
Being self-employed does not change the basic rules around who can guarantee your tenancy.
Usually, tenants start by asking a parent, family member or close friend.
The problem is that being willing to help and being accepted by the landlord are two different things.
Your guarantor may be expected to:
- Live in the UK
- Have good UK credit history
- Have a stable income
- Earn enough to cover your rent if necessary
- Sometimes own a UK property
They will usually have to go through their own referencing checks too.
So you might have a parent who would happily guarantee your rent, but they live abroad. Or a friend who earns well but does not meet the landlord's guarantor affordability requirement.
This is why it is worth finding out exactly what the landlord wants before asking someone to take on the responsibility.
You can read our full guide on who can legally be a guarantor in the UK for more information.
What if you are newly self-employed?
This is where renting can get particularly tricky. Imagine you left a £50,000 salaried job eight months ago and now run your own business earning £60,000 a year.
Financially, you may actually be in a better position than you were before, the problem is that you cannot magically produce two or three years of accounts.
Your first tax return might not even have been due yet.
If that is your situation, give the letting agent whatever evidence you do have.
That might include current bank statements, signed client contracts, savings, invoices, previous employment records or an accountant's letter.
A good reference from your current or previous landlord can help too. If you have been paying similar rent on time every month, that gives your new landlord some useful evidence of how you behave as a tenant.
But even with all of that, some landlords will still ask for a guarantor. If that is the only thing holding your application up, apply to Rentmigo today and see if we can help.
Can a professional guarantor help if you are self-employed?
Yes. A professional guarantor can be useful when you can afford the rent but cannot provide the type of guarantor the landlord wants.
Instead of asking a parent or friend, you apply to a professional rent guarantor company.
If your application is accepted, the company acts as the guarantor for your tenancy.
This can be particularly useful for freelancers, contractors and business owners who have the money to rent but do not fit neatly into normal employment-based referencing.
It can also help if you just don't know anyone who meets the landlord's guarantor requirements.
Not every landlord accepts professional guarantor companies, so it is always worth checking with the landlord or letting agent first.
Our guide to whether professional guarantors are accepted by all landlords explains what to check before you apply.
If your landlord is happy to accept Rentmigo, you can apply online and we may be able to act as your professional guarantor.
Get started with Rentmigo today.
How can you make your rental application stronger as a self-employed person?
Do not wait until you have found the perfect property to start looking for your paperwork. If you know you are going to move, get everything ready first.
Pull together your recent tax returns, bank statements, accounts and previous landlord references. If you use an accountant, let them know you are planning to rent and may need a reference.
It is also worth speaking to the letting agent before you pay a holding deposit.
Tell them you are self-employed, explain how long you have been trading and ask what they will need to see.
If they tell you a guarantor is likely to be needed, you can deal with that early too.
You do not want to find a property you love, start the application and then lose several days trying to work out who can guarantee you while another tenant is ready to go.
If you think you may need professional help, read our guide to questions to ask before choosing a guarantor company.
So, is it harder to rent while self-employed in the UK?
Yes, it can be. But the problem is not necessarily how much you earn, it is how easily you can prove it.
Someone earning £45,000 through a permanent job can hand over three payslips and be very easy for a referencing system to understand.
A freelancer earning £60,000 from several clients may have to provide tax calculations, bank statements, accounts and an accountant's reference to prove the same thing.
That is the frustrating bit. The more paperwork you have ready, the easier you make it for the landlord to say yes.
And if you are earning enough but the landlord still wants the extra security of a guarantor, you have options.
You can ask a family member or friend, or use a professional rent guarantor service like Rentmigo if the landlord accepts one.
Rentmigo works with tenants who can afford their rent but do not have a UK-based guarantor, including self-employed workers and freelancers.
If you have found the property you want and a guarantor is the thing holding your application back, apply to Rentmigo today and see if we can help you secure it.
