Charities urge Labour to tackle ‘discriminatory’ PRS guarantor rules

The Labour government is being urged to overhaul renter legislation which 28 charities say will hit poorer tenants from being able to access PRS housing.

The charities have written an open letter to the Housing Secretary Angela Rayner with their concerns over the Renters’ Rights Bill.

They include Shelter, Generation Rent, the Joseph Rowntree Foundation (JRF) and the renters’ union Acorn.

The Bill is currently under scrutiny in the House of Lords and the charities caution that without amendments, private landlords might increasingly demand guarantors.

They warn that excessive guarantor demands will enable landlords to unfairly exclude tenants deemed ‘undesirable’.

Right to refuse to rent

Among the Bill’s aims is to deny landlords the right to refuse to rent to families with children, tenants with pets and renters on benefits.

However, campaigners argue that unchecked guarantor stipulations could serve as a loophole so landlords could bypass the new rules.

Shelter’s research shows that in recent years one in five renters face the guarantor requirement, which is around 600,000 people, and they would struggle to find a guarantor should the landlord demand one.

That would effectively bar them from securing a rented home, the campaigners say.

Guarantor demands could escalate

The letter has been coordinated by the Renters’ Reform Coalition who warn that without tighter controls, guarantor demands could escalate.

This would become an issue after the legislation is in force.

The letter notes: “Landlords will simply switch to further abusing their power to request a guarantor, even when there is very little danger that a tenant will not pay rent.”

The coalition says it doesn’t want to abolish guarantors outright but urges Labour to ban such requests when a tenant’s earnings cover the rent or if the landlord hold insurance against payment defaults.

They also want to cap a guarantor’s liability at six months’ rent.

Struggle to find guarantors

The letter’s signatories warn that tenants with modest incomes or on benefits often lack connections to wealthy homeowners willing to back their tenancy.

This, they argue, entrenches inequality, leaving vulnerable renters at a disadvantage.

Dan Wilson Craw, the deputy chief executive of Generation Rent, said: “Everyone needs a safe, secure and affordable home.

“Unfortunately, many tenants face discrimination from landlords when searching for a place to live.

“Even if you can afford the rent, if you’re self-employed or relying on benefits, landlords can demand multiple months’ rent upfront, or that you get a homeowner to guarantee your rent.”

He welcomed Labour’s plan to curb advance rent demands but stressed the need to address excessive guarantor conditions.

Block guarantor requirements

Previously, Leeds Central and Headingley MP Alex Sobel tabled an amendment to block guarantor requirements for tenants passing affordability tests, though it didn’t reach a vote.

Housing Minister Matthew Pennycook acknowledged the issue’s complexity, and in that debate said: “I appreciate fully that obtaining a guarantor can be difficult for some prospective tenants, and I understand the reasoning behind his amendment.”

He noted that guarantors can sometimes help tenants access properties but said the matter remains ‘under review’ for future debate.

A spokesperson from the Ministry for Housing, Communities and Local Government said: “We have no plans to restrict the use of guarantors, but we are clear landlords should not discriminate against any prospective tenants and consider them on a case-by-case basis.”