The guarantor trap: How raising the rent could release the person standing behind your tenancy
2 months ago | 9 comments
Financially capable renters struggling to meet guarantor requirements
12:01 AM, 13th August 2026, 3 weeks ago
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Overseas tenants are struggling to provide a UK-based guarantor despite being able to afford the rent, according to new data.
Findings by Zero Deposit reveal rents in London have soared to more than £2,000 a month, as landlords increasingly demand guarantors from prospective tenants.
The news comes as, under the Renters’ Rights Act, landlords and agents can no longer accept large amounts of rent in advance.
Growing demand for guarantors
According to the data, London rents have increased by almost 10% (9.9%) in the two years since May 2024, rising from an average of £2,088 to £2,294.
Over the same period, UK average rents have risen from £1,252 to £1,383. This 10.5% increase is greater than the capital’s, but London rents remain almost 50% (49.6%) higher than the national average.
With rent in advance banned under the Renters’ Rights Act, there is a growing demand for guarantors.
Data from Foxtons reveals that almost two-thirds (63%) of its tenants come from overseas, meaning many international renters may struggle to provide a UK-based guarantor despite being able to afford the rent.
Struggling to meet guarantor requirements
Sam Reynolds, CEO of Zero Deposit, said tenant competition remains intense, with many financially capable renters struggling to meet guarantor requirements.
He said: “London is unlike any other rental market in the UK. Rents are significantly higher than the national average, competition for homes is intense, and a large proportion of tenants are relocating from overseas.
“In that environment, it is increasingly common for renters to be financially capable of affording a property, but unable to provide a traditional UK-based guarantor. That can create unnecessary friction at the point of application, even when demand for housing is strong”.
Gareth Atkins, Foxtons managing director of lettings at Foxtons, added: “London remains one of the most competitive rental markets in the country, but the diversity of today’s tenant base means the ability to connect landlords with a broader pool of suitable tenants quickly and efficiently has become increasingly important.
“For landlords, lengthy void periods can have a significant impact on returns, particularly against a backdrop of rising costs and ongoing regulatory change. Every day a property sits empty represents lost income, which is why reducing friction in the lettings process has never been more important.
“At the same time, many prospective tenants who can comfortably afford their rent may not meet traditional referencing criteria. This is particularly common among international renters, students and the self-employed – groups that make up an important part of London’s rental market. The industry needs solutions that reflect the realities of today’s tenant base.”
The news comes as the government is urging landlords to review guarantor agreements that were put in place before the Renters’ Rights Act came into force.
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Member Since October 2022 - Comments: 258
9:13 AM, 13th August 2026, About 3 weeks ago
Why does everyone act so surprised that London rents are above the national average, when property prices and values are also so much higher than the national average?
What should be surprising is that anybody even bothers renting out property in the capital these days when the gross yield can be as little as 3-4%. This is less than the interest on a mortgage and certainty less than you would get investing just about anywhere else.
Member Since June 2015 - Comments: 351
11:47 AM, 13th August 2026, About 3 weeks ago
Why focus on London? This is an issue all over the country.
International applicants often don’t have UK based guarantors and have happily paid several months up front to secure a home. The only alternative now is for them to pay for a professional guarantor, which adds a significant monthly cost to their living expenses.
One of my Indian tenants had to move out of a student house, as he was no longer a student and I have a group of students signed up for September. He very carelessly quit his job before finding a new room. Last year he paid me 4 months rent upfront front as he didn’t have a guarantor. He’s paid monthly ever since with no problem. This year he thought he would be able to do the same and it came as a huge shock when he was turned down for 15 different rooms. In the end I had an unexpected vacancy in one of my professional share HMOs and he has moved there. Not ideal but the only practical solution I could come up with to ensure the student house was vacant in time for September. Obviously no guarantor, so I’m hoping he carries on with his unblemished rent payment history. How many landlords are happy to take the risk? How many would have gone for a court eviction? I had served both a Section 21 before the end of April and a Section 8 using ground 4a on the 1st May. He tried extensively to find a place but just physically couldn’t find another landlord who would accept him. Bring unemployed meant the professional guarantor route was tricky as well as expensive.
Member Since May 2018 - Comments: 2471
1:16 PM, 13th August 2026, About 3 weeks ago
When Labour introduced the Labour Renters Rights Act they banned payment of rent upfront. This was a problem for many pensioners because pensioners who cannot satisfy the income criteria might still have savings and be able to afford to rent a property…by paying rent upfront.
Now of course payment of rent upfront WITHOUT necessarily increasing the advertised rent (which pushes up market rents) COULD have been a solution to the problem of overseas tenants needing property in London in order to be able to work….except that Labour banned it under the Labour Renters Rights Act.
The Labour Renters Rights Act is a disaster: It is government that is damaging the private rental sector and putting rents up. Hardly any labour MPs have ever run a business so why would they understand markets?
Member Since September 2018 - Comments: 3713 - Articles: 5
2:57 PM, 13th August 2026, About 3 weeks ago
Reply to the comment left by Jo Westlake at 13/08/2026 – 11:47
…and not all building insurance /legal cover allow the guarantor to be a company. Many demand PERSONAL guarantors only or legal cover is void.
Member Since May 2018 - Comments: 2471
3:14 PM, 13th August 2026, About 3 weeks ago
Reply to the comment left by Reluctant Landlord at 13/08/2026 – 14:57
Even if you had a personal guarantor, who would want to take THAT risk under the Labour Renters Rights Act?
Being able to take rent upfront would have been a possible solution, if labour had not banned it. Being able to take more than the advertised rent (in order to pay for additional insurance) might have been another possible solution, just as it might have been a possible solution to the issue of a tenant asking you whether he could have a pet during a tenancy; but Labour banned that possible solution with the Labour Renters Rights Act as well.