On various occasions I’ve had prospective tenants ask me what they should do if they’re unable to get a rental guarantor.
Personally, as a Landlord, I would feel extremely uncomfortable about giving tenancy to anyone that couldn’t arrange a Guarantor. Why? Because I’d only be thinking the following…
Why doesn’t anyone trust this person enough to be their Guarantor?
Of course, that’s just me being cynical (by nature) and limiting my risks. There are, of course, many genuine reasons for why someone is unable to arrange a Guarantor. However, regardless of the justifications, it’s still a problem for Landlords. Or at least, it should be a problem.
As a tenant, I imagine it’s extremely frustrating to be deprived from renting a property because of an external factor like the inability to arrange a Guarantor, because at the end of the day, the lack of Guarantor isn’t really an indication of how good or bad someone will be as a tenant. But unfortunately, they are rather necessary for the landlord’s own security.
Most letting agents do require tenants to have a guarantor, but ultimately it is down to the Landlords discretion. If a landlord wants to take on tenants that don’t have a guarantor, they can do so at their own risk. So the trick is to convince the landlord…
How to substitute for a Guarantor
There are ways tenants can try to persuade landlords to waive the need for a guarantor. I’ve found the methods listed below to work quite well.
A Guarantor is all about providing the landlord with a sense of security. A landlord wants to know that if their tenant falls in arrears or damages the property, he/she has a security cushion to soften the blow. So as long as a tenant is able to provide a substitute form of security, then the landlord might be willing to make a compromise.
Method 1) Flaunt your positive rental history
Landlords love good rental history. In fact, it’s one of the most valuable attributes a tenant can personally approach me with.
If you’ve been a tenant for several years and can provide positive references from previous landlords, then make sure you do that! All good landlords will take references from previous landlords seriously, and then contact them for verification purposes.
Method 2) Pay rent in advance
Paying several months worth of rent upfront can definitely provide a sense of security that landlords crave. However, while it’s an easy fix, it’s not an option available for most tenants as they won’t have the funds to make such a grand suggestion.
But, if you do have the cash laying around, this could be the solution.
Method 3) Rent Guarantee and Legal Expenses Insurance
You could suggest paying for a rent guarantee and legal expenses insurance policy. What is that exactly? It’s an insurance policy for Landlords that covers rent if tenants fall in arrears. Additionally, if the tenant runs up any legal costs (e.g eviction costs), then the insurance company will insure the costs.
I’ve got policies like this in place, and have actually had to claim before when my tenant fell into arrears. It’s actually a pretty good substitute (if not better) than a guarantor. However, I recommend having both in place. Policies can vary in price, but it cost me approximately £120 for a year, which I think it pretty damn good.
If you are willing to pay that extra insurance cost, it maybe just enough to clinch the property you want to rent, without a guarantor. Here’s more details on Rent Guarantee And Legal Expenses Insurance.
Just to clarify, landlords can take this out at their own will, and many do.
Method 4) Increase the security deposit amount
Another way of persuading the landlord is by increasing the security deposit amount.
Security deposits are most often used for the following:
- to clean the property at the end of the lease term, if the tenant did not leave the property in a clean condition;
- to pay utility bills, if the tenant did not pay the bills; or
- to pay rent, if the tenant did not pay the rent.
In order for a tenant to persuade the landlord, he/she could offer two months worth of deposit, as opposed to the regular one month. This should provide the landlord with a better sense of security.
It’s also important for tenants to be aware of the landlord’s legal obligation to secure the deposit into a Tenancy Deposit Scheme. This means that the landlord won’t be able to unfairly keep the deposit at the end of the tenancy- which is an important security measure for tenants if they’re going to be paying more than the average deposit.
Method 5) Rent Guarantee and Legal Expenses Insurance & Increase the security deposit
If you’re particularly in love with a property, and you’re willing to lick gum off the landlords shoe to secure the tenancy, then you could always combine the two methods; double the security deposit and pay for the insurance.
While this particular method will significantly increase the initial costs of becoming a tenant, you should remember that the security deposit can be recouped at the end of the tenancy, so the only real cost will be the insurance.
Method 6) Use a “Rent Guarantor Service”
I find this rather bizarre. But it’s out there, and it’s happening.
There are now companies out there that will act as your Guarantor, whether you’re a student, in employment, in receivership of benefits, or even if you have poor credit history or CCJs. I suspect you may have to meet some requirements, and they probably won’t back extremely high-risk cases (but I could be wrong).
I have no idea how it all works, but below I have listed a couple of companies that offer Guarantor services. In theory, the risk should be all on them, so why not give one a try if you’re in need of a Guarantor?
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Students and the University Guarantor schemes
Quick note for students!
Your university or college may provide a rent guarantor scheme, which means they could act as your guarantor to help you become a private renter.
If available, you will have to apply for the scheme, and meet certain requirements to be approved. For example, you maybe required to have a satisfactory academic record, and proof of income sufficient enough to pay the rent.
To find out if your University or college offers a guarantor scheme, you should enquiry with the relevant accommodation service or search their website for further details.
Personally, I would accept applicants without a guarantor if they could make me feel secure in other ways.
But as mentioned, at the end of the day, it is ultimately down to the landlords own discretion.
Disclaimer: I'm just a simple landlord blogger; I'm not qualified to give legal or financial advice. Any information I share is my opinion based on my personal experiences as an active landlord, and should never be contrued as legal or professional advice. For more information, please read my full disclaimer.