Rent guarantor demands rise among landlords

A third of letting agents say more landlords are now insisting on rent guarantors before agreeing tenancies, research reveals.

According to Alto, 33% have seen an increase in guarantor requirements over the past year, while 11% report a marked rise across their portfolios.

The lettings management platform questioned 250 estate and letting professionals and found that the change is emerging as borrowing costs remain high and the Renters’ Rights Act gets closer.

Rent guarantor safeguard

Alto’s chief executive, Riccardo Iannucci-Dawson, said: “Landlords are nervous, and that’s feeding through into stricter tenant requirements.

“Higher borrowing costs, regulatory reform and longer eviction timelines all change the risk equation.

“When landlords feel they have less room for error, they look for additional safeguards.”

He added: “Guarantors are increasingly seen as a financial safety net but this also adds complexity for agents.”

Guarantors bring stability

The firm‘s latest Agency Trends Report highlight Section 21’s removal which will lengthen the possession route through a more complex court route.

As a result, guarantors are being used more often where affordability is stretched, or tenant profiles are less certain.

Government data shows possession claims still running above pre-pandemic levels, while arrears pressures continue to affect tenants facing higher living costs.

At the same time, rents have risen over the past two years, lifting the financial thresholds applicants must meet.