How to Get a Rent Guarantor for Renting
How to rent a home if you are a first-time tenant, do not have a high income or credit score? A guarantor may be very helpful in these situations.
Are you having trouble finding a rental home in the UK? First-time renters often have a hard time passing a tenant reference check. If a landlord feels you aren’t able to make regular rental payments, they might pass you over for a more reliable tenant. Providing a guarantor can help you out here.
In this guide, you will learn how to get a rent guarantor.
- What Is a Rent Guarantor?
- When Do You Need a Guarantor?
- Who Can Be a Guarantor?
- How Long Does the Guarantor’s Liability Last?
- How to Find a Guarantor?
- What Is the Build To Rent Approach to Guarantors?
A guarantor is an individual that agrees to pay for rent and damages on your behalf. Landlords require tenants to present a guarantor if they believe you might default on rent payments during the tenancy. In such cases, a guarantor can step in and fulfil these obligations on your behalf. Your guarantor must sign a guarantor agreement - a legally binding document outlining a guarantor’s responsibilities1. It carries details such as:
- When the guarantor can be asked to pay money
- The length of the agreement and how long the guarantor’s liability will last
- What the guarantor’s responsibilities are in a joint tenancy
Make sure you and your guarantor read the agreement carefully before it is signed. For joint tenancies, the guarantor agreement may apply to the total rent paid by all the tenants. It might not be limited to your share of the rent. In such cases, make sure to review the terms and conditions of the agreement carefully and inform the guarantor accordingly. If the guarantor is not willing to take on this responsibility, you can discuss the issue with the landlord and limit the guarantor’s liability to your share of the rent and damages caused.
Given the demand for rental properties, landlords don’t want to spend too much time on renters with weak financial profiles. They require proof of employment and references from previous landlords testifying to your reliability as a tenant – only then will they let their property to you.
Here are some of the most common situations when your landlord may require you to provide a guarantor2:
Affordability is a big concern for landlords. They need to know whether a prospective tenant is earning enough to pay their rent on time every month. Thus, as a rule, landlords will calculate a tenant’s rent-to-income ratio when carrying out a tenant reference check. Typically, a landlord prefers renting to tenants with an annual income that is at least 30 times their monthly rent.
If your rent-to-income ratio is low, landlords will require a guarantor to ensure payment.
Poor Rental History
Landlords also check a tenant’s rental history and ask for references from their last landlord. If you are a student or if this is your first time renting an apartment, then your landlord will need you to provide a guarantor.
Poor Credit Score
You are going to need a guarantor if you have little or poor credit history. Your credit score indicates your trustworthiness regarding paying back your creditors. If you have a low credit score, then you can increase it by making regular bill payments over time.
Click here to learn how you can improve your credit score using rent payments.
Moved to the UK Recently
Landlords also require overseas tenants to provide a guarantor, so if you have moved to the UK from a different country, then make sure you have a guarantor when you apply for tenancy.
This is one of the most important questions regarding how to get a guarantor for renting. From a legal point of view, anyone can become a guarantor. They must be at least 18 or 21 years of age, based on the agreement.
It is not required by law for the guarantor to be related to the tenant by blood. However, for the sake of simplicity, tenants usually supply their parents, family members, or close friends as guarantors. It is a significant responsibility and not everyone can take it on. Most landlords also use the following eligibility criteria for accepting guarantors:
- They must own a home
- They must have a good credit history
- They must be a UK resident – this makes it easier to take legal action
- They must demonstrate the ability to pay rent on the tenant’s behalf
- They must not be retired
Landlords will also subject guarantors to a tenant reference check. If your guarantor fails this check, the landlord will not let the property to you.
The term length of a guarantor’s liability is based on the contents of the guarantor agreement or any verbal agreements between the parties involved. Many guarantor agreements tend to be open-ended. They specify the guarantor’s liability as per the terms and conditions of the agreement. In such cases, the guarantor will still be liable to fulfil their obligations if the tenancy gets extended beyond its fixed term. If the rent increases while the tenancy is in effect, then the guarantor will also be liable to pay the higher rent.
An open-ended guarantor agreement will last until the tenancy ends legally via a possession order from the court, a mutual surrender of the tenancy, or if the tenant submits a valid notice to quit the tenancy.
Guarantors can also negotiate the terms and conditions of the agreement. This can limit their liability. Additionally, the guarantor’s liability will end if the terms of the original agreement state that the guarantor is not liable for any changes in the tenancy. However, if the guarantor agrees to these changes, then their liability will continue. This also applies to minor changes that do affect the main terms and conditions of the agreement.
As discussed earlier, when it comes to figuring out how to get a guarantor for renting, most people opt for their parents, immediate family, or close friends. Explain your situation to your potential guarantor and show them that they can trust you to pay rent on time. You must also make them aware of their role and responsibilities as a guarantor. Once an agreement has been signed, make sure to provide the guarantor copies for recordkeeping.
In case you don’t find someone who can act as a guarantor, consider paying for a guarantor service and register with them instead. This option can be used by:
- Foreign nationals whose families live outside of the UK
- Tenants that don’t have any parents or relatives with sufficient financial security
- Tenants that cannot find a person willing to be their guarantor
- Tenants that do not have a family
Using a guarantor service can lead to extra costs. These depend on your total annual rent and whether you are employed. To utilise this service, you can3:
- Find a suitable rent guarantor company and fill out an application
- Provide proof of identification – These include photo ID and your National Insurance number if you are a UK citizen. Students must also offer proof of study and working professionals need to provide proof of income
- Find a suitable rental property and share its details with the guarantor service
- Find a co-signer – this does not have to be a UK resident, and you will have to provide their photo ID, proof of residential address and the National Insurance number
- Pay the service fee
Once you have done your part, the guarantor service will establish a set of terms and conditions with your landlord and sign the agreement.
If you don’t want to use a guarantor service, you can also pay rent in advance. There is no legal limit here, and landlords can ask you to pay up to 6 months of advance rent4. However, most will agree to receive 1 month of rent in advance.
Build To Rent is an emerging rental model in the UK. Other than the wide range of amenities it provides to renters, Build To Rent offers considerable flexibility in terms of guarantors. Build TO Rent landlords are not overly stringent, which means that you can easily have your guarantor accepted. They are also willing to work with a guarantor service, which makes it easier for you to find a home.
We hope you found our guide to how to get a guarantor for renting useful. If you are having trouble negotiating the terms and conditions of your guarantor agreement with a private landlord, consider renting a Build To Rent home. This can simplify the renting process for you to a large extent.