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 your 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 anyone will ever discover you are in an IVA unless you tell them.

The Implications of moving to a New Rented Property

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 stop you 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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40 thoughts on “Rent a House during an IVA

    Rachel says:

    Hi I am 4 years into an IVA and want to rent a different property. my credit rating is ‘good’ on experian. will i still fail a credit check for a letting agent? many thanks

      Hi Rachel

      The record of your IVA remains on your credit file for 6 years from the start date. As such if a letting agent does a credit check against you, I assume they will discover that you are in an IVA. This may or may not be an issue. It is down to their individual letting policy.

      If as you say, your credit rating is good, perhaps they will be happy and you will pass the check. But there is no guarantee of this. It will be up to the individual agent.

    Haleema says:

    I have an IVA and I’m looking to rent a new place, however I’ve heard an IVA can negatively affect credit scores but mine still shows up as excellent on Experian, is that wrong? I’m worried because all agencies say they will perform credit checks, even though I pay my IVA on time every month and work full time and have no criminal history or other financial issues, will they still not rent to me based on the IVA?

      Hi Haleema

      Normally if you start an IVA, a record of the arrangement will show on your credit file. This will automatically make your credit rating poor. As a result if a letting agent does a credit check against you (which is standard procedure), you will fail this and they may not want to offer you a property.

      From what you have said (and it seems Rachel above had the same experience), for some reason your IVA is not recorded on your file. If this is the case and your credit rating is excellent then in theory you should not have an issue. You will pass a credit check and the letting agent will potentially offer you a property.

      All I can suggest is you give it a go. You may be lucky.

    Natalie says:

    If I have an Iva and want to rent a property with my partner, will we be rejected. My experian score is 300/900

      Hi Natalie

      I am afraid that it it highly likely you will fail the letting agent’s credit check and they will reject your application. I suggest you be honest with the letting agent about your IVA and the fact that your credit rating is poor. Ask if it would be possible for your partner to rent in their name as the registered tenant and you be named on the tenancy as a permitted occupier?

    Jason says:

    I been in a IVA now for two half years, I have been up front with all estate agents. Due to my landlord is selling up and gave two months notice, I’m getting worried now as a month almost gone and I got 3 young children and my wife. What can I do to make sure have a roof over our heads as don’t want to put out in the street. If you can help that be great

      Hi Jason

      I am afraid you are not in an easy situation. Unfortunately you are likely to fail a letting agents credit check due to your poor credit rating. My best advice is be up front with any letting agent you speak to. Explain that you are likely to fail their credit check and ask if there are any options to overcome the issue.

      Things to think about are can your wife be the named tenant and you just a permitted occupier? Would they be OK if someone stood as a guarantor for you? Is there an option for anyone to assist with you paying rent up front?

    Jason says:

    Hiya James,
    Thankyou for the comments, regarding a guarantor we have no one who be excepted, my wife got a very good credit score but she don’t work. Having no family around we are struggling to get another place. I have been upfront with all estate agents and knocked me back straight away. Is there other help I can get please regarding finding a place. Thankyou

      Hi Jason

      Unfortunately I do not have any good news for you. Other than the suggestions I have already made, I am not aware of any additional help available. The only way forward may be to try and find somewhere to rent directly with the landlord rather than through a letting agent. However that would require you knowing someone with a property to rent.

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