Charity warns over increased reliance on guarantors under reforms

Reply to the comment left by JB at 04/06/2026 – 13:19
I don’t think anybody actually knows how the courts are likely to view the Renters Rights Act as nobody seems to have much experience of dealing with the courts under the Renters Rights Act yet. That may be why you are getting different opinions. There was a proposal during the consultation for the Renters Rights Bill to ban guarantors, or limit their liability to six months’ rent, that does not appear to have made it into the final act and this may have caused some confusion. It appears then that you can still have guarantors.

The Renters Rights Act does say that you cannot restrict information on the availability of a property and that you cannot discriminate. There is government guidance on rental discrimination at the link below and it specifically applies to tenants with children or tenants on benefits:

https://www.gov.uk/government/publications/rental-discrimination-under-the-renters-rights-act-2025/rental-discrimination-under-the-renters-rights-act-2025

The wording says: “The rental discrimination measures prevent landlords and agents acting on their behalf from providing unfair treatment to renters, both sitting or prospective, based on their having children or receiving benefits.”

The guidance has a section saying “what is not considered unlawful discrimination” which says:

Consideration of income
Landlords can take a tenant’s income into account when considering if the rent is affordable. They are not liable for a breach if a set income requirement is not met, regardless of whether the person has children or receives benefits.

If the prospective tenant complains to their local authority about a refusal to offer a tenancy because the use of an income test was discriminatory, the local authority should consider if:

the prospective tenant has demonstrated that they could meet the set income requirement

the landlord has accounted for all forms of income, including state benefits and pension, and treated them of equal value

the requirement has been raised because the person has children or receives benefits

When deciding between multiple prospective tenants who have met the income requirements, landlords should not consider whether they receive benefits or have children in reaching their decision.

Landlords should set the same income requirement for all prospective tenants and treat all forms of income equally. It is up to the prospective tenant to demonstrate they meet this requirement, but landlords should take all forms of income into account. Landlords should not unreasonably refuse to accept a means of evidencing income that a tenant provides, whether a bank statement, proof of benefit letter, pay slip or otherwise.

And so some of the guidance is quite clear: You can and you SHOULD consider affordability. And if you are applying the same criteria to ALL PROSPECTIVE TENANTS then you aren’t discriminating against tenants on benefits or tenants with children. I.e. if you were to say “guarantor required” for ALL tenants then you would not be discriminating. If you were to say “guarantor required” for tenants on benefits then you would be discriminating.

Essentially the Labour Renters Rights Act obliges you to apply more stringent referencing checks, including affordability, to ALL TENANTS in order not to discriminate. If you consider that tenants on benefits are higher risk then this sentence in the guidance needs a second look:

“When deciding between multiple prospective tenants who have met the income requirements, landlords should not consider whether they receive benefits or have children in reaching their decision. ”

So if you were to request from ALL TENANTS the last two years of SA302, last two years of self-assessment tax returns, in addition to last two years of income from all sources including pensions and/or benefits, and specify that a guarantor will be required, then you wouldn’t be discriminating. But you’d have to be very careful of the wording of your reply if you turned down a tenant who was on benefits or had children.

Of course, it might be that knowing a guarantor makes a difference could be an advantage to some tenants on benefits, or some tenants with children. I have taken tenants on benefits with a guarantor in the past. I haven’t done it for many years because I found out that if it turns out that the tenant is NOT eligible for benefits then the benefits people can come back and get the money back off you, the landlord. So whilst I am still aware of that risk I and haven’t housed benefits tenants for years I could never NOW give this to a tenant as their reason for failing to secure a property.

I think that faced with multiple prospective tenants I would just reply with “the other tenants exceeded the requirements.” The Renters Rights Act does not oblige you to provide the personal financial details or other details of the successful tenants to the failed tenants, nor could it ever do this as it would breach data protection laws.

What this boils down to is “…careful what you say to failed tenants with children or on benefits” and ALSO take very careful note about what the guidance says about a failed tenant complaining TO THE LOCAL AUTHORITY.

Reply to the comment left by Beaver at 04/06/2026 – 14:08
this is the interesting part for me…

Landlords should set the same income requirement for all prospective tenants and treat all forms of income equally. It is up to the prospective tenant to demonstrate they meet this requirement, but landlords should take all forms of income into account. Landlords should not unreasonably refuse to accept a means of evidencing income that a tenant provides, whether a bank statement, proof of benefit letter, pay slip or otherwise.

Not all benefits are ‘equal’. Some like PIP are health dependant and time limited. Can this a really counted as regular stable income if the award is only guaranteed until a set date? If this were a professional, this income would be regarded as coming from a temp contract type work arrangement.

Should you only take the LHA rate into account for housing costs, after all this is the ONLY state benefit given for this purpose. Other benefits, like unemployment, child benefit etc, are to pay for necessities like food etc, heating lighting water etc council tax.. Is the rent truly affordable if you have to dip into these benefits to top up the rent?

I suppose you COULD look at the EPC of the rental property and work out what it would cost for the tenant to heat it etc on an annual basis and consider these figures in pre formal affordability check? Ditto for the council tax (if the cost is more than where they are moving from)

A lot of work to qualify why you refused a benefit tenant it seems if the Council start sniffing…..

Reply to the comment left by Reluctant Landlord at 04/06/2026 – 14:32
My experience of renting to tenants on benefits when I did it was that they would be claiming child benefit, housing benefit or other benefits and they would ALSO have other forms of income. They were doing hair or nails, child-minding or child care work in one form of another, cleaning etc. I would find the evidence of income when they leaving or they left. And the problem is that these other forms of income could have made them ineligible for the benefits they were receiving and the benefits people could then come and get the benefits off me. So I just stopped taking benefits tenants.

If you request the same proof of income from ALL tenants whilst not stating that you DON’T take benefits tenants then you aren’t discriminating. So if you ask ALL tenants for last two years of SA302, last two years of tax returns, plus evidence of all other income, a character reference, proof of id including two forms of photo id and a recent phone contract then you wouldn’t be discriminating. This is because you’d be asking for evidence of ALL forms of income from all tenants.

If a social housing tenant who is unsuccessful in securing your property complains to the local authority or a tribunal that you discriminated against them they have to prove it. So IF they contact you, or IF the local authority contacts you then you now have to be very careful indeed about what you tell them. But not only do you not have to provide the personal details, and personal financial details of the successful tenants, you actually have an obligation not to do it.

Unintended consequences!

Who could have foreseen this?

Oh that’s right…………EVERYONE with an IQ above room temperature.

Reply to the comment left by David100 at 04/06/2026 – 15:16
Anybody with experience of running a small business or with experience of letting out commercial property could have foreseen this. But that doesn’t include most labour MPs.

There are some new prat-falls that landlords are going to have to avoid. In fact, avoiding prat-falls and learning about being a landlord in order to be sure of being one of the landlords who can get his property back is why I’m on this site. I actually run a small business and I’m a small portfolio landlord. But if landlords share their experiences (anonymously) we all get to learn. I didn’t know about the requirement for the landlord to send the renters rights act information sheet to all named tenants for example, I found out on this site, not from gov.uk. That requirement was not widely publicised by the government.

So looking at what’s currently available there are some obvious “don’t do this” pratfalls, having applied more stringent application criteria to ALL tenants, and having asked them for evidence of ALL income (and possibly savings or other assets):

– If a benefits tenant or local authority contacts you asking when a property will be available don’t give them a date, tell them “after you have screened all applicants”

– if a benefits tenant or local authority contacts you asking you how many applicants you have had don’t tell them: Tell them either you have had or expect to have a lot of applicants.

– if a benefits tenant or local authority who were together or individually unsuccessful in securing your rental property contacts you asking you why they were unsuccessful give them the minimum information and don’t under any circumstances tell them any form of words that could lead them or a tribunal to infer that it was because they were on benefits or had children EVEN IF it is obvious that the high-earning tenants with no children clearly had more disposable income. If you did this you would have discriminated and breached the act.. Instead, just give them a form of words that lets them know that the successful tenants exceeded the criteria applied to all tenants, or were top of the list in satisfying the affordability criteria. You don’t have to provide details of the successful tenants and you should not do it because you would be falling foul of data protection legislation.

Reply to the comment left by Beaver at 04/06/2026 – 15:49
All things being equal I try and accept tenants who are looking for a long term tenancy and who I’d get on with. Maybe I should specify an IQ higher than room temperature … ie no MP’s. What about choosing someone of a particular political persuasion