Landlord Alert on Rising County Court Judgements and Tenant Referencing

Landlord Alert on Rising County Court Judgements and Tenant Referencing

County Court Judgements (CCJs) in England and Wales surged by 11.6% in 2025, reaching over one million new cases. This rise intensifies the importance of tenant referencing for landlords amid recent rental law changes.

Leaders, a lettings agency, has highlighted a significant increase in County Court Judgements (CCJs) that landlords must consider when assessing tenant applications. Their report, based on feedback from 717 landlords and 860 tenants, reveals that almost 1.02 million new consumer CCJs were registered in England and Wales in 2025, marking an 11.6% rise from the previous year and the highest annual total since 2019. This data, sourced from Registry Trust, underscores a deteriorating financial backdrop for landlords.

Additionally, analysis by LexisNexis Risk Solutions indicates that 3.14 million UK adults—approximately 6% of the adult population—have at least one CCJ or other adverse financial event recorded on their credit profile. Given that 12.9 million people reside in the private rented sector, landlords are increasingly likely to encounter prospective tenants with adverse credit histories during referencing checks.

Impact of Rental Reform on Landlord Risk Management

The Renters’ Rights Act has removed Section 21 eviction notices and limited advance rent payments to one month, significantly reducing landlords’ financial buffers against tenant default. Leaders emphasises that these changes mean landlords can no longer rely on protections after tenancy commencement and must place greater emphasis on thorough referencing before letting.

Leaders’ survey shows that 41.7% of landlords delegate tenant referencing to their letting agents, making it the most common approach. Among landlords who take a more hands-on role, 37.4% say referencing has become significantly more important since the advance rent ban, with another 7.8% considering it slightly more important. Only 13.1% report no change in their referencing priorities.

When asked about the most critical factor in tenant acceptance decisions, 40.6% of landlords cited employment status and income, closely followed by 38.8% who prioritised the referencing report provided by letting agents. Together, these two factors dominate landlord decision-making, while previous landlord references, credit history, and subjective impressions are less influential.

Tenant Referencing in a Challenging Financial Environment

The rise in CCJs reflects wider economic pressures on tenants, including cost-of-living challenges and tighter credit conditions. For landlords, this means the risk of rent arrears and tenancy disputes has increased. The removal of Section 21 and restrictions on advance rent payments limit landlords’ ability to mitigate risk through possession notices or financial buffers.

Consequently, tenant referencing has become a critical risk management tool. Effective referencing helps landlords identify applicants with stable financial backgrounds and reduces the likelihood of problematic tenancies. Letting agents play a pivotal role in this process, often providing detailed credit and affordability assessments.

However, the increased reliance on referencing reports also raises questions about consistency and standards across agents. Landlords must ensure that referencing processes are thorough and compliant with data protection and equality legislation. The complexity of tenant affordability assessments may require landlords to update their referencing criteria and collaborate closely with agents.

Practical Implications for Landlords and Letting Agents

For small portfolio landlords, the rise in CCJs and changes to tenancy law mean tenant screening must be more rigorous. Landlords should review their referencing procedures, considering not only credit checks but also employment verification and income assessment. Delegating referencing to professional letting agents can provide expertise and reduce administrative burden, but landlords should remain involved in setting criteria and reviewing reports.

Letting agents may need to enhance their referencing services, offering more detailed financial assessments and advising landlords on risk. They should also keep abreast of regulatory developments affecting tenant screening and ensure compliance with the Renters’ Rights Act and related legislation.

Landlords should also consider how to document referencing decisions carefully. In the event of tenancy disputes or possession proceedings, clear records of referencing and decision-making processes can support landlords’ positions. Maintaining evidence of compliance with referencing and affordability checks is advisable.

Uncertainties and Areas to Monitor

While the increase in CCJs is clear, the longer-term impact on tenancy sustainability remains uncertain. Changes in the economy, housing supply, and government policy could alter tenant affordability and landlord risk profiles. The Renters’ Rights Act itself may be subject to further amendments or guidance clarifying landlord and tenant responsibilities.

Landlords should monitor developments in tenant referencing technology and data sources. Advances in credit reporting and affordability assessment tools may improve risk evaluation but could also raise privacy and fairness concerns. Keeping informed about best practices and regulatory updates will be essential.

What Landlords Should Consider Now

• Review and update tenant referencing criteria to reflect increased financial risks and legal changes.
• Consider using professional letting agents for referencing to ensure thorough and compliant assessments.
• Document all referencing decisions and maintain records to support potential possession claims.
• Stay informed on regulatory changes related to tenant screening, affordability checks, and tenancy law.
• Evaluate the balance between risk management and tenant fairness to avoid discrimination claims.

Supporting Landlords with Compliance and Management Tools

The Landlord Association (TLA) offers membership that provides access to compliance resources and practical information relevant to tenant referencing and tenancy risk management. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to help landlords and letting agents organise their property records, manage rental documents, and keep evidence of referencing and tenancy decisions together. ORBIT also includes a property management AI assistant to support landlords in maintaining compliance and monitoring regulatory developments.

Exploring TLA membership can provide landlords with tools and guidance to adapt to the evolving rental sector environment, particularly in managing the increased risks highlighted by the rise in County Court Judgements and the impact of the Renters’ Rights Act.

Looking ahead, landlords should prioritise robust tenant referencing as a frontline defence against tenancy risks, adapting their practices to the changing legal and financial context.

Sources: Landlord Today