Rent a House during an IVA

Rent a House during an IVA

If you rent a house or flat it should not be affected if you start an IVA. However there may be implications if you decide to move to a new property.

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Can you continue to Rent a House if you start an IVA?

Starting an IVA will not affect your ability to continue to live in a property you are currently renting. Your landlord will not be told. As such as long as you continue to pay the rent on time you should have nothing to worry about.

Your negative credit rating will not affect your landlord’s property. A property cannot be blacklisted. It is the individuals who live in the property who can have a poor credit rating but not the property itself.

The Arrangement might actually improve your relationship with your landlord. Once the Arrangement is in place you should always be able to pay your rent on time because the required cash is budgeted in your living expenses.

It is unlikely that your landlord will ever discover you are in an IVA unless you tell them.

The Implications of moving to a New Rented Property during an IVA

A monthly payment IVA will normally last 5-6 years. During this time there could be many reasons why you might need to move to a new rented property.

In theory there is nothing to prevent you from doing this. However if your new rental payment is either higher or lower than the amount you previously paid it will affect the Arrangement.

If the rent is higher your living expenses budget will increase. You may not be able to afford this without reducing your IVA payments. It might be possible to do so but the agreement may have to be extended as a result.

If your rent falls after moving to a new property and your disposable income goes up as a result you may have to increase your IVA payments .

Will your Credit Rating prevent you from Renting a new House during an IVA?

Once you start an IVA your credit rating will become poor. This will cause problems if you want to move and rent a house or other property using a letting agent during the Arrangement.

The issue is most letting agents will credit check you. You will fail this because of your IVA. As such it is usually best to be upfront with the agent about your situation. If it is going to be a problem there are some things you can offer to overcome this.

You could suggest paying rent 6 months in advance. However given your financial situation this is likely to be difficult. Alternatively you could offer a Guarantor. This could be a family member or friend who confirms they will pay your rent if you are unable to do so.

Your poor credit rating will not normally be taken into account if you are planning to move into a rented property owned by the Council or local Housing Association.

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18 thoughts on “Rent a House during an IVA

    Jan says:

    Hi there. I am in year two of IVA and living in rented accommodation. My landlord has indicated that I may have to give up the apartment because he wants to have it over to his daughter. I’m in a pretty desperate situation because of the IVA it will be difficult to get through credit check for another home. I don’t have anywhere else to live as my children live abroad or in Scotland. I’m thinking of cancelling the IVA or dropping out. It’s making my life even worse than the debt

      Hi Jan

      Renting a new property during an IVA can be tricky because of your poor credit rating. If you use a letting agent they are likely to carry out a credit check against you which you will fail. As discussed in the article above the only way around this is normally either to pay rent in advance (which you are unlikely to be able to afford) or get someone with a good credit rating to act as a guarantor for you.

      When you speak to letting agents be honest. Tell them you have a poor credit rating so are likely to fail a credit check but it is under control and you can provide a guarantor. Many will then help.

      This is important: Cancelling your IVA will not help your credit rating. The record of the Arrangement will stay on your file for 6 years from the start date whether you cancel or not. As such if you can afford to it will be best to keep up with it so your debts are paid off.

      Alternatively if you really cant afford the payments you could consider failing it and then going bankrupt. The advantage with bankruptcy is you do not have to make ongoing payments unless you can afford to…..

    Corrine says:

    Me and my partner are desperate to rent our own place as at the moment we live with family. However I am on an IVA plan and have been for almost a year now a CCJ is included in that. Will this effect me renting and will a check be able to see the ccj? We are viewing a place and dont want to be rejected if we go for it?

      Hi Corrine

      Unfortunately the fact you are in an IVA will have an impact on you being able to get a rented property I am afraid. As discussed in the article above, the issue is that you will fail any credit check carried out by a letting agent because the IVA will show up (the CCJ as well). As a result they will be probably reject you as the primary tenant unless a third party can act as a guarantor for you.

      Does your partner have a good credit rating? If so a possible way round the problem might be for them to act as the main tenant without you being named on the tenancy agreement. You should discuss this with the letting agent. Be up front about your IVA and credit rating as there is no point in wasting your time.

    Colleen says:

    Hi

    I have an IVA on my account 4 yrs old. However it is not in place any more because its been cancelled by credit fix due to investigation of fraud. I shared a communal building with communal letterbox at the time. I wondered if it would affect my credit rating as I want to rent. My credit rating is 756

      Hi Colleen

      If an IVA has been taken out in your name in the past even if it is now cancelled the record that it existed will remain on your credit file. As highlighted in the above article the record will not come off until 6 years from the start date of the Arrangement. You can check this out by getting a copy of your credit file.

      If the record is showing on your file then this will affect your ability to get a rented property through a letting agent. They will do a credit check against you which you are likely to fail. In that situation you will struggle to rent through an agent unless someone can act as a guarantor on your behalf.

    Emma says:

    Hi
    Me and my partner have a lva we what to rent we have a guarantor but the letting agents still is not letting us rent what can we do thanks

      Hi Emma

      Unfortunately this is a real problem for people in an IVA. Letting agents are not obliged to help you if you fail their credit check even if you can offer a guarantor. The only advice I can give is try a different letting agent. Other than that you might have to put your plans on hold.

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