Multi-AST deposit penalty claim — advanced rent defence?
2 months ago | 2 comments
Surge in demand for guarantors under Renters’ Rights Act
8:01 AM, 2nd June 2026, 11 hours ago
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More than half of tenants could need a guarantor following the introduction of the Renters’ Rights Act, a deposit scheme claims.
Research by Zero Deposit suggests the proportion of local authority areas where tenants are likely to fail affordability checks could rise from one in five to almost one in two.
Under the act, landlords and agents can no longer accept large amounts of rent in advance.
Expect guarantors to become an increasingly common requirement
According to the data, average rents currently standing at £1,438 per month, equivalent to £17,256 per year, tenants would typically need to earn at least £43,140 annually in order to pass affordability checks.
However, average earnings across England currently sit at £41,859, leaving the average renter £1,281 below the required threshold.
Across England’s 288 local authority districts, tenants are likely to require a guarantor in 19.8% of locations due to average earnings failing to meet affordability requirements.
Sam Reynolds, CEO of Zero Deposit, said under the Renters’ Rights Act, landlords will seek greater financial protection, meaning more tenants will need a guarantor.
He said: “While the Renters’ Rights Act is designed to improve security for tenants, it also significantly changes the way landlords manage financial risk within the private rental sector. With restrictions on upfront rent payments and fewer traditional safeguards available, landlords and agents naturally place greater emphasis on affordability checks and income protection when assessing prospective tenants.
“As a result, we expect guarantors to become an increasingly common requirement for renters who fall outside standard affordability criteria, particularly younger tenants, overseas applicants, self-employed workers, and those moving to high-cost rental areas.”
Tenants may not have access to a suitable guarantor
Across England’s 288 local authority districts, tenants are likely to require a guarantor in 19.8% of locations due to average earnings failing to meet affordability requirements.
London is home to 22 local authority districts where average incomes fall below the affordability threshold, while the South East contains a further 21 such areas.
However, Zero Deposit warns many tenants may not have access to a suitable guarantor.
Mr Reynolds adds: “The challenge is that the traditional guarantor model is no longer practical for many renters. Not every tenant has access to a suitable guarantor, and even when one is available, the referencing and verification process can introduce delays at a point where rental properties move extremely quickly.”
According to the English Housing Survey, 21.5% of private renters pay more than one month’s rent in advance.
Zero Deposit claims that, with this option no longer available to landlords, many are expected to seek alternative forms of financial protection.
The deposit company suggests landlords could respond by increasing the affordability threshold from 2.5 times income to three times income.
If this becomes the new industry standard, Zero Deposit calculates that the proportion of local authority districts in which the average tenant fails affordability checks would rise from 19.8% to 47.6%, as average earnings in 137 local areas would fall below the required level.
Tags:
guarantor, rent in advance, Rental Affordability Crisis, Renters’ Rights Act, tenant affordability
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Member Since April 2018 - Comments: 427
2:23 PM, 2nd June 2026, About 5 hours ago
Reply to the comment left by Beaver at 02/06/2026 – 14:12
It has been suggested a guarantee could be worthless unless it is secured on a property.
Member Since May 2018 - Comments: 2117
2:31 PM, 2nd June 2026, About 5 hours ago
Reply to the comment left by David at 02/06/2026 – 14:23
Ian Narbeth has more experience of that kind of thing than I do and Ian has said that before the Labour Renters Rights Act, if you had a guarantor, if the tenant didn’t pay, typically you contacted the guarantor, the guarantor contacted the tenant and the tenant either paid or left. But since the advent of the Labour Renters Rights Act and as labour has abolished no-fault evictions without first sorting out the courts, I don’t know how reliable that ‘Guarantor’ would now be in practice. I would have thought stringent affordability checks would now be way more important. But even if you were using a guarantor, I would also have thought that you’d now have to apply more stringent affordability checks to the guarantor as well.
Other people here have more experience of this than I do. But none of us has any significant experience of the Labour Renters Rights Act. It’s new and it was introduced before the courts were sorted out.
Where I do have experience is in managing commercial lets. With a commercial let one of the things that you learn is, in the event of a tenant defaulting, what data would I have to collect to cover myself in the event that I needed to use a debt collection agency or to sell the debt on?
Member Since October 2020 - Comments: 1209
2:52 PM, 2nd June 2026, About 4 hours ago
I think we might see either further regulations or court rulings limiting the scope of guarantor agreements at some point.
Member Since May 2018 - Comments: 2117
2:58 PM, 2nd June 2026, About 4 hours ago
Reply to the comment left by DPT at 02/06/2026 – 14:52
Could be, and I don’t know how mortgage providers or insurance companies view them. My own mortgage company wouldn’t let me rent out to asylum seekers or to homeless people (not that I’d want to, although some landlords can and will make money this way). Similar to asylum seekers and homeless people, I’m not sure how a mortgage company would feel about a tenant who had failed credit-referencing living in your property with the possibility that you might not be able to recover your property because the courts hadn’t been sorted out. I think they’d be relying on sale of a property being mandatory grounds for repossession, but that only works if the courts are working.
It seems to me that it mostly now all comes back to individual tenants being able to pass credit-referencing.
Member Since October 2020 - Comments: 1209
3:35 PM, 2nd June 2026, About 3 hours ago
Reply to the comment left by Beaver at 02/06/2026 – 14:58
I assume we may also come to see lenders adjusting the fees or rates of their products based on the additional risks posed by The RRA.
Member Since February 2023 - Comments: 89
3:59 PM, 2nd June 2026, About 3 hours ago
Seeing as this government and Shelter (sitting on millions and millions) have made a mess of everything in the rental market, they should be forced to act as guarantors because they don’t seem good at anything else.
Member Since May 2018 - Comments: 2117
4:13 PM, 2nd June 2026, About 3 hours ago
Reply to the comment left by Sheridan Vickers at 02/06/2026 – 15:59Labour refused to publish the results of the justice impact test of the Labour Renters Rights Bill, now the Labour Renters Rights Act, on the courts.
At the moment we don’t have the evidence of what the effect on the courts is, although we know that labour have not yet sorted the courts out. If labour’s Renters Rights Act overwhelms the courts then regardless of whether pay the rent, look after the property, get on with the neighbours becomes ALMOST mandatory (judges still have discretion, e.g. in the case of a landlord making a minor administrative error) then along with driving up market rents, what Labours Renters Rights Act will have done is to create a situation where, a renter cannot get a property unless:
(1) They are already earning large amounts of money, or
(2) They have a very rich guarantor, or
(3) They are asylum seekers renting properties from Clearspring Ready Homes, Serco and Meers where these three companies have relatively good credit-referencing and the Home Office is in effect acting as the guarantor, with a big cheque book because it costs so much money to house asylum seekers in hotels.
It won’t be possible to house a lot of the potential renters, especially because many of them will have had their earnings held down, their hours restricted, cannot find any work at all, or maybe just lost their employment because of the changes imposed by labour that made the economy stagnate, and therefore they will fail credit-referencing.
Credit-referencing has to be mandatory for all tenants because the Labour Renters Rights Act says that you cannot discriminate against tenants or withhold information on the availability of a property. Collectively labour MPS are very ignorant of business and this is because most of them have never run a business. One of the consequences of this is that almost none of them has any direct experience of trying to deal with anti-discrimination legislation in a small business.
Labour has SAID that they are sorting the courts out….but labour had better make sure that they DO sort the courts out.