Is it time for landlords to have guarantors for all tenants?

Is it time for landlords to have guarantors for all tenants?

11:19 AM, 12th August 2022, About a month ago 13

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Hello everyone, In these difficult economic times, firms are regularly going bust and creating financial problems for their employees, and the SE (self employed) are just as vulnerable.

Would it not make sense to have guarantors for all tenants?

Thank you,

Grahame



Comments

Paul Essex View Profile

13:14 PM, 12th August 2022, About a month ago

I do think we are heading that way, deposits are too small to be effective.

The bonkers idea of deposit passporting is still in the white paper. If anyone can explain how this will work please let us know!

Finally the decisions on claims by deposit adjudicators seems highly variable. We on the other hand are expected to rush around to get three quotes in just a few days - have you ever tried to get three plasterers to visit and quote in the 'expected' timeframe.

Robert M View Profile

15:09 PM, 12th August 2022, About a month ago

As the supply of PRS properties is shrinking (due to s24 tax, extra regulatory burdens, demonisation of landlords, loss of s21 notices, etc, etc....), and demand is increasing, landlords are often faced with dozens of potential tenants to choose from, so it is natural that they will opt for those who present the least risk. Rent (and damage) guarantors reduce the risk that landlords are exposed to, so it is inevitable (and a wise precaution) that most landlords will choose tenants who have suitable rent guarantors (perhaps even multiple guarantors).

Any tenant who wants to rent a property should ideally have one or more suitable rent guarantors already lined up, so as to improve their chances of being offered the tenancy.

Ian Narbeth View Profile

15:35 PM, 12th August 2022, About a month ago

We are requiring guarantors much more regularly than before. The obvious advantage is that without a guarantor, if the tenant stops paying rent he or she lives rent-free until the landlord eventually gets them out.
With a guarantor (usually a relative or close friend) the defaulting tenant is told in no uncertain terms: "I am not willing to pay for you to live rent-free. I am not willing to default and have a CCJ against me, ruining my credit. Sort yourself out and either pay the rent or see if the landlord will accept a surrender so that the liability stops."
If landlords are forced to accept pets without substantially increased deposits being allowed, it would be very prudent to get a guarantor. Guarantors will not be happy to pay for their pal's pet's destruction and damage.

Luke P

15:45 PM, 12th August 2022, About a month ago

I haven't rented without a home-owning guarantor since 2007. I can't believe lots of LLs still do!

moneymanager

16:11 PM, 12th August 2022, About a month ago

For someone to have capcity as a guarantor they eithe rhave to have a dammed good salary or money in the bank, a host of "good intentions" is not enough. With underwiting already difficult, I'd ask the guarantor to simply pay up front, we now have anumber of prepaid lets.

Luke P

16:32 PM, 12th August 2022, About a month ago

Reply to the comment left by moneymanager at 12/08/2022 - 16:11
Just owning a property will do.

TheBiggerPicture

7:36 AM, 13th August 2022, About a month ago

Reply to the comment left by Luke P at 12/08/2022 - 15:45
Luke, which organisation do you use for setting up the guarantor?

Laura Delow

7:57 AM, 13th August 2022, About a month ago

The problem is, Guarantors are a good thing but not always possible. I suggest Rent Protection including Eviction Cover is a must for all tenancies including those on Housing Benefit / Universal Credit.

Luke P

8:29 AM, 13th August 2022, About a month ago

Reply to the comment left by Laura Delow at 13/08/2022 - 07:57
I operate hundreds of properties in one of the poorest areas of the UK. guarantors are always possible. Almost nothing empty and never for more than a week or two.

Insist and ye shall be surprised…

Luke P

8:32 AM, 13th August 2022, About a month ago

Reply to the comment left by TheBiggerPicture at 13/08/2022 - 07:36
Organisation? I do it myself. Land Registry search for excessive Charges over the guarantors property and check ownership (insisting in both owners sign in the event there’s more than one). I wrote up my guarantor agreement back in 2007, had a lawyer cast their eye over it (not that there much better than you or I) and utilised it successfully I’d say probably 100 times since then. The key point is stating they’re responsible for the life of the tenancy whether that be fixed term or periodic.

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