While a guarantor for rent is typically a close relative or friend, it doesn’t always have to be. Understanding who can be a guarantor is useful as a guarantor must meet specific criteria. We delve into who can be guarantors, who qualifies and what responsibilities they take on. Let’s look at what you need to know.
What is a guarantor?
A guarantor agrees to pay your rent if you can’t pay it for any reason. They provide both the landlord and the tenant with extra security that rent will be paid on time and you can continue to live there.
If you find yourself in a situation where you can’t pay the rent that you owe to your landlord, they can ask your guarantor to pay instead.
Guarantors are required to sign an agreement defining their responsibilities and commitment to them.
Why might you need a guarantor for rent?
Some landlords and letting agents may ask private renters for a guarantor if:
- You’re renting with bad credit
- It’s your first time renting
- You’re a student renter
- Your income is low
- You’re unemployed
- You’ve recently moved to the UK
Who can be a guarantor for rent?
A guarantor is usually a close friend or relative of the renter. However, it can be any adult, provided they have a good credit history, stable income, or savings over a certain amount.
A guarantor must meet several criteria to be accepted by a landlord or letting agent. They usually have:
- a good credit history and no significant debts.
- a steady and sufficient income to cover the tenant’s rent if needs be.
- are [preferably] UK residents.
A guarantor’s required income level
To be eligible to be a renter’s guarantor, you typically, need to earn at least three times the amount of the annual rent.
For example, if the monthly rent is £800, you should earn a minimum of £28,800 annually. This is to show you have the financial capacity to cover the rent if required.
A letting agent will offer guidance throughout this process, and they can help ensuring ensure that all requirements are met.
Can a pensioner be a guarantor for rent?
Yes, a pensioner can be a guarantor if they meet the required criteria. Their income, which may come from pensions, savings, or investments, must be sufficient to cover the rent.
Some landlords may require additional proof of income stability for pensioners acting as guarantors.
When might a guarantor be rejected?
Letting agents and landlords will likely check your guarantor’s credit score, proof of their income and other financial information, such as savings.
If they see fit, they might refuse a guarantor, based on, for example, a poor credit report, outstanding debts, or insufficient income to cover the tenant’s rent if need be. A guarantor may also be rejected if they live abroad or don’t own a property. This is because it can be harder to take legal action against them if they can’t meet their obligations.
Are guarantors only liable for unpaid rent?
Guarantors may be liable for more than unpaid rent, depending on the agreement, such as damage to the property if there is any. Therefore, anyone considering becoming a guarantor should check the agreement carefully and be clear on all contractual obligations.
Are things different in shared accommodation?
If you share accommodation with others, under one tenancy agreement (i.e. a joint tenancy) the guarantee may apply to everyone’s rent, not just your own. This means your guarantor would have to pay if one, or more than one, tenant didn’t pay their rent.
This is another reason why it’s essential to check the guaranteed agreement carefully. Once signed, the guarantor will be bound by the terms and conditions. It might be possible to negotiate the terms before it’s signed, but not after.
Of course, an HMO can also be a sole tenancy agreement; for example, in the case of shared rooms in-house, it’s usually one tenancy per room.
Understanding the guarantee agreement
Before committing to any agreement, it is important to be clear and understand the following:
- What you as a guarantor are liable for? (e.g. is it just rent or wear and tear?)
- When the liability ends
- How long does the guarantor agreement last?
- What happens in the case of a joint tenancy?
- The terms and conditions
- Is the agreement open-ended?
- This could mean that the guarantor is agreeing to rent increases, or that their liability could extend beyond the fixed period.
What if you can’t get a guarantor?
There are options if you can’t get a personal guarantor, such as:
- Using a guarantor service
- Offering to pay your landlord more rent in advance.
- Offering to pay a higher deposit upfront.
- Taking out a rent guarantee insurance
- Reaching out to charities or your local council for rent deposit, bond or guarantee schemes
- Students should speak to their university or college to see if they can provide funding, support, or even just advice.
What are the risks?
Both renters and guarantors should be aware of the responsibilities and risks involved.
For the renter, the risks could be that if the guarantor fails to meet their obligations, the tenant could face eviction. Financial issues can also strain relationships, especially if the guarantor is a family member or friend.
For the guarantor, the risks are that they are obliged to pay the rent if the tenant cannot. This could impact their finances. Failing to cover the rent can also negatively affect the guarantor’s credit score.
Role of letting agents
Having a professional letting agent on board can help you with this aspect of renting. A good letting agent can advise how to get started to secure a guarantor and navigate the requirements.
They also ensure that the guarantor meets the landlord’s criteria by conducting credit and background checks.
Last Updated: May 22nd, 2024
