Surge in demand for guarantors under Renters’ Rights Act

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.

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?

I think we might see either further regulations or court rulings limiting the scope of guarantor agreements at some point.

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.

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.

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.

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.

The RRA has now limited the amount of money that can be reclaimed from a guarantor to SIX MONTHS rent. … and should you be unfortunate enough for the renter to croak it owing you money you can’t claim anything from the guarantor.

Unusually (deliberately), it doesn’t mention anything about what happens if the guarantor no longer wants to be a guarantor

Reply to the comment left by GlanACC at 03/06/2026 – 07:22
Really? Six-months? That’s interesting….the Renters Rights Act is new and I didn’t know that bit yet. I thought that a guarantor could still guarantee the rent the same as before. Bit of a shame that because when I used to house social housing tenants (I don’t any more) some of them used a guarantor, usually a family member.

Of course, if you choose to house asylum seekers instead you don’t have to worry about credit referencing and the Home Office are going to commit to paying the rent for you for much longer than six months. I think they are only supposed to house asylum seekers for 56 days but Clearspring, Serco and Mears are going to act as your guarantor for much longer than that.

But if asylum seekers aren’t an option for you as they aren’t for me as my lender and insurer don’t permit me to house asylum seekers or homeless people, operating as a landlord under the Labour Renters Rights Act all comes down to much more stringent credit referencing to avoid the high risk tenants and making sure that if you do take a tenant on, you have enough information should you have to pass the debt on to a debt collection agency doesn’t it?

I would have thought (along with the right to rent check) that should include character reference, credit reference including two forms of photo ID, last two years of tax returns or last two years of SA302, two forms of evidence of address including recent phone CONTRACT showing address (i.e. not a burner phone), recent statement from a bank showing evidence of savings. And probably let all tenants know that they may also be subject to a CRB check. Probably have the guarantor as well because six months is better than no months. And unless you say this to ALL tenants you would be discriminating and discrimination has been banned under the Labour Renters Rights Act.

The labour Renters Rights Act prevents you from withholding information on availability of a property from anybody so in effect labour have mandated enhanced credit screening of all tenants along with the right to rent check.

Reply to the comment left by Beaver at 03/06/2026 – 10:18
To be clear, the guarantor is active for the length of the tenancy (as I understand it) BUT should the tenant get into arrears – say for 10 months of rent then only 6 months can be claimed from the guarantor.