Luna Harper
In the UK, a guarantor is someone who vouches for a tenant's ability to pay rent and signs a legal agreement to cover the tenant's rent payments if they default. While it is not always necessary to have a guarantor to rent in the UK, many landlords and agents ask for one before offering a tenancy. Guarantors are typically over 21 years old, have a good credit history, and are UK residents. They may be relatives or close friends, but they don't have to be. If individuals cannot find a suitable guarantor, they can turn to professional guarantor services, which provide a similar safety net for landlords but at a cost to the tenant.
| Characteristics | Values |
|---|---|
| Need for a guarantor | Required by landlords/agencies to rent a property in the UK |
| Alternative options | Persuade the landlord to waive the need for a guarantor by offering a larger deposit or 6 months' rent in advance; Use a private guarantor company like Housing Hand or UK Guarantor; Rent from a resident landlord who shares the accommodation |
| Guarantor requirements | Usually, a UK resident; May need to be a parent or relative; May need to provide proof of income or ability to pay |
| Guarantor agreement | Should be in writing and set out the guarantor's legal obligations; May extend to other conditions like damage to the property; Should specify the duration of the agreement |
| Tenant's liability | May be liable for the entire rent if other joint tenants don't pay their share, unless the agreement specifies otherwise |
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What You'll Learn
Private guarantor companies
If you are unable to find a suitable guarantor, there are private guarantor companies that can provide this service. These companies act as your UK-based guarantor, allowing you to secure your chosen accommodation and pay your rent in manageable instalments.
One such company is Housing Hand, which offers reliable guarantor services for both students and professionals. They have supported over 95,000 tenants since 2013 and have been acquired by UK Guarantor, another guarantor service. To apply, you will need to provide proof of study or income, as well as a co-signer who can take responsibility for meeting your tenancy obligations. The fee for this service starts at £295 and can be paid upfront or split over 6 or 12 months.
UK Guarantor is another option, catering to students, recent graduates, and working professionals. They have been in the student accommodation sector since 2000 and have an online application process. Similar to Housing Hand, their fee also starts at £295, depending on the rent you pay.
These private guarantor companies can be a helpful solution for those who are unable to find a traditional guarantor, particularly international students or those who are new to the country. They provide an alternative way to secure rental accommodation by offering a reliable guarantor service and flexible payment options.
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Rent guarantee insurance
Requirements for Rent Guarantee Insurance
To qualify for rent guarantee insurance, the property must be residential and in the UK. Landlords must also obtain satisfactory references for each tenant and guarantor, including written references from previous landlords or employers and credit history checks. Tenants must earn at least two and a half times the monthly rental amount (or three times if self-employed).
Cost of Rent Guarantee Insurance
The cost of rent guarantee insurance varies depending on factors such as the type, size, and location of the property, as well as the excess amount the landlord is willing to pay. Excess refers to the portion of a claim that the landlord pays, and a higher excess typically results in a lower premium. Rent guarantee insurance can be purchased as a standalone policy or as part of a landlord insurance bundle.
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Joint tenancy agreements
In the UK, a landlord may ask for a guarantor when renting to a tenant. This is especially common when the tenant cannot prove their ability to pay the rent, for example, through a credit check. A guarantor agreement can apply to all of the rent, and not just the share of one tenant. This means that if one tenant fails to pay their share, the landlord can pursue the other tenants for the arrears.
There are several options for tenants who are unable to provide a guarantor. One option is to pay more rent in advance. Another option is to request a guarantor agreement that only covers the portion of the rent for which the tenant is responsible. It may also be possible to negotiate with the landlord to limit the guarantor's liability to only the tenant's rent payments or any damage caused by the tenant.
It is important to carefully review the terms of any guarantor agreement before signing, as the guarantor will be bound by its conditions once it is signed. Tenants should also be aware that changes to the tenancy agreement, such as a rent increase or renewal, may bring the guarantor's liability to an end unless the agreement specifies otherwise.
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Student guarantor schemes
In the UK, student tenancy agreements often require a guarantor due to students' common lack of regular income. This is usually a friend or family member, but some organisations offer guarantor services for a fee. These services are designed to streamline the renting process for both students and landlords.
Several companies offer student guarantor schemes in the UK, including:
- Homeppl Guarantid: This scheme assesses a tenant's financial situation and offers different tiers of service. Their fees are among the lowest for UK guarantors, costing about the same as three weeks' rent. They also offer a quick setup process, which can be completed within a day.
- YourGuarantor: This scheme, supported by the National Union of Students, offers services starting from 3.5% of the tenant's rent. They do not require a co-signer or guarantor and cater specifically to students.
- Housing Hand: As the UK's largest guarantor service, Housing Hand has supported over 95,000 tenants since 2013. They offer a simple application process and a high acceptance rate of 98%. Students can pay the fee upfront or split it over 6 or 12 months.
- UK Guarantor: This scheme has been designed specifically for students, recent graduates, and working professionals. They enable tenants to pay rent in instalments and have a simple online application process. Their fees start at £295, linked to the total rent in the tenancy agreement.
These schemes provide an alternative for students who cannot provide a traditional guarantor, making it easier for them to secure accommodation. The fees charged by these schemes vary, but they generally offer a more accessible option for students renting in the UK.
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Landlord requirements
Landlords will usually want a guarantor who lives in the UK as it is easier for them to take legal action against a UK resident if they need to. If you are an international student or are coming from abroad, this may present a problem for you. In this case, the landlord may ask you to pay more rent in advance.
If you are a student, your university or college may operate a rent guarantor scheme. If your university or college accepts your application to join their scheme, it will act as your guarantor to help you become a private renter. Usually, the university or college will only accept you onto their scheme if you are not in debt to them, have a satisfactory academic record, and have enough income to pay the rent.
If you are a working professional, you will need to show that you earn 1.5 times your contribution to the rent. You will also need to provide proof of income, such as the last three months of payslips or bank statements.
If you are unable to find a guarantor, you may be able to persuade your landlord to waive the requirement by offering a larger deposit or paying 6 months' rent in advance. Alternatively, you could consider renting from a resident landlord, as they typically do not require a UK-based guarantor.
It is important to carefully review any guarantee agreement before signing, as the guarantor may be bound by its terms and conditions for the duration of the tenancy. The agreement should clearly set out the guarantor's legal obligations, which may include covering any damage caused to the property.
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Frequently asked questions
It depends on your situation and the landlord's preference. If you are a student, your university or college may operate a rent guarantor scheme. Alternatively, you can pay a private guarantor company for this service. If you are a working professional, you can also use a private guarantor company. However, if you can demonstrate that you earn enough to cover the rent, you may not need a guarantor.
The guarantor usually has to be someone who lives in the UK as it is easier for the landlord to take legal action if needed. The landlord may also want to check the guarantor's ability to pay the rent, such as by carrying out a credit check.
You could offer to pay a larger deposit or several months' rent in advance to give the landlord a greater sense of security. You could also consider renting from a resident landlord, as they typically don't require a guarantor.
A guarantor is responsible for paying the rent if the tenant cannot. They may also be liable for any damage caused to the property, depending on the terms of the agreement.
