Quick guide to rental guarantors

If you have rented a property in the last year or so, you may be among the 1 in 5 tenants who was asked to provide a rental guarantor in order to secure the property. If you are new renting, you may well be asked to supply a guarantor in the near future.

The findings were contained in the latest English Housing Survey, underlining how an infrequent request has become far more commonplace. If you’re not sure what a rental guarantor is, or whether you may be asked to provide one, here’s our quick guide.

What is a rental guarantor?

A rental guarantor is someone who agrees to pay the rent if the tenant is ever unable to make the payment. They may also be liable to pay for any damage in the property if the tenant can’t cover the cost. Usually a rental guarantor is a parent or close relative. A landlord may require a rental guarantor when they need reassurance their rent will always be paid.

Who makes a good rental guarantor?

The person nominated will need to be financially secure and aware of the risks that go with the role. The guarantor will usually go through credit checks and referencing to establish if they could afford the rent, if they are called upon. As such, it helps if the rental guarantor has a good credit history, owns their own home, is in permanent employment and doesn’t have a history of debt, late payments or country court judgements.

Who may need to supply a rental guarantor?

When prospective tenants apply to rent a property, a number of checks will be undertaken. A rental guarantor may be requested if the tenant doesn’t quite meet all the standards but they aren’t a million miles off and the landlord would like to give them the renting opportunity.

It is quite common for a rental guarantor to be required if:

• This is the tenant’s first time renting and therefore they have no rental history or references from a past landlord
• The tenant is self-employed, a freelancer or is on a zero hours contract, but has proof of earnings
• The tenant has just started a new job or is on a low wage
• The tenant is a student
• The tenant has a low credit score
• The tenant has lived at lots of previous addresses or has lived abroad

How quickly will a rental guarantor be asked to step in?

There is no standard procedure or boilerplate contract when agreeing to become a rental guarantor. In theory, a landlord could ask a rental guarantor to stump up for a missed payment the day after it fails to show up in their bank account. Attention should be given to the guarantor agreement when it is drawn up, as it is a legally binding document when signed.

Are there alternatives to a family member?

There are companies that will partner with a tenant to become their rental guarantor in return for a monthly fee. The company will usually undertake reference checks on the tenant and may require a ‘co-signer’ to sign up at the same time. This person doesn’t have to pass credit checks but will act as an alternative point of contact during the tenancy.

If you are about to start your search for a rental property and would like to know more about the referencing and rental guarantor process, please give us a call.