May 19, 2021
4 min read
If you’re a recent graduate, have poor credit history, are unemployed, haven’t rented before or you’re an international student, you likely know the guarantor situation like the back of your hand. For those of you who don’t know – or are facing it for the first time – a rent guarantor is someone who provides a guarantee that your rent will be paid.
For would-be renters who do not yet have a financial history or are otherwise unable to become a tenant easily, securing a guarantor can mean the difference between having your own space or continuing to live with friends and relatives. To find out more about this important piece of the renting puzzle, read on.
A guarantor agrees to vouch for the tenant and accepts the liabilities on their behalf. That means if a tenant can’t pay rent or causes damages to the property (costing more than the deposit to repair), the guarantor is liable for paying the expenses.
Essentially, the landlord or Letting Agent can legally request the guarantor to step in to cover rent arrears (money owed) if the tenant fails to do so.
When a landlord or letting agency isn’t convinced that you can meet your monthly rent, or if there are concerns about your debt or causing damage to a property, you may require a guarantor to be able to rent the space.
It’s most common for the agent or landlord to require a guarantor when the tenant has a low credit score or a low income. Parents of young adults or students are often asked to guarantee their child’s rent.
Common scenarios where you’ll likely need a guarantor include:
This is not an exhaustive list. The agent or landlord will look at your finances and history during tenancy referencing and, as a result, may request a guarantor.
Given the financial liability involved, rent guarantors usually know and trust the tenant, such as family members or close friends (though they do not have to be).
However, a guarantor can really be anyone willing to guarantee your rental agreement. Still, they must be more financially stable than yourself and able to satisfy the criteria set out by the landlord or agent, such as:
Most landlords and Letting Agents will want a guarantor who lives in the UK, which can make it particularly difficult for international students to secure a guarantor.
A guarantor isn’t always necessary. If you can show proof of income or pass a credit check, you may not need a guarantor.
If you need a guarantor but don’t have one available, a landlord may accept you if you can pay some rent in advance. Since the security deposit is capped at 5 weeks’ rent (or 6 weeks if the annual rent is over £50,000), landlords may accept you as a tenant if you offer to pay more rent in advance. Although this can be difficult to stomach, it may be enough for the landlord to offset the risk of renting to you.
If you want to keep family and friends out of it, you may be able to use a service to guarantee your lease. The upside is obvious: you don’t have to ask mum to put her savings on the line so you can snag your dream flat. The downside is that this service incurs a charge.
There are several companies offering guarantee services, including:
So, you want to be a guarantor? While it’s easy to assume that your nearest and dearest won’t rack up debt that could fall into your lap, the reality is that it can and does happen. It’s best to approach this situation with the worst-case scenario in mind. If your loved one did default on their rental payments or damage the property significantly, could you comfortably afford to step in to cover the expenses?
If you fail to pay the unpaid rent or damage costs, the landlord could apply for a county court judgement (CCJ) against the tenant and their guarantor.
A rent guarantor is obliged to fulfil the requirements through the duration of the lease. Most leases last 6 months to 1 year, although some landlords use month-to-month rental agreements. Before you sign to become a guarantor, ask yourself if you would be able to afford payments throughout the entire lease duration, if it came to that.
The guarantor is subject to the same credit check as the tenant. Typically, the guarantor should earn 3 times the annual rent. Letting Agents will be looking for secure finances from those making more than enough to cover their own financial obligations as well as the tenant’s liabilities. For many agencies, the guarantor must be a homeowner too.
The guarantor is liable for unpaid rent and possibly additional costs; it depends on the agreement. In most cases, a guarantee agreement also extends to other conditions of the tenancy, such as damage caused to the property that exceeds the deposit amount, unpaid council tax, and even legal costs that the landlord has sustained due to the tenant.
Before signing the guarantor agreement, the guarantor should read through the tenancy agreement to understand the tenant’s (and, therefore, their own) responsibilities. It’s best to go into this agreement fully aware of the potential costs.
When renting a house with other tenants, the guarantor agreement will normally apply to the rent for the whole property, rather than just one tenant’s share. If any of the other tenants don’t pay, the landlord or Letting Agent can call upon the guarantor to pay any rent arrears.
Now that you know all about rent guarantors, you’re prepared to take the next step and look for suitable spaces. Discover more on Boomin. Our advanced property site offers a wide range of suitable spaces to rent and you can book viewings online 24/7 with trusted and experienced Letting Agents. Start your rental search today.