10:08 AM, 21st November 2022, About A year ago 3
Increasingly worried landlords are demanding that their tenants offer a guarantor in the face of looming rent arrears, research reveals.
According to referencing firm Goodlord, the region with the largest proportion of new tenancies being offered with a guarantor is for renters in the South West.
That’s where 28% of landlords are requesting their tenant uses a guarantor to bring peace of mind – nearly double last year’s figure of 15%.
However, tenants in Greater London have seen a fall in the number of tenancies requiring a rent guarantor between 2021 and this year.
Despite the fall, the data highlights that 15% of nervous landlords now demand that a rent guarantor is used. Last year it was 12%.
Historically, requesting a guarantor to pay the rent should the tenant default was only usually done for renters with a poor credit history and students.
But it increasingly appears that landlords needing a guarantor is now non-negotiable for growing numbers of landlords looking at the growing cost of living crisis.
Blake Richmond, Goodlord’s managing director of referencing, said: “The cost-of-living crisis, coupled with steep rising rental prices, has exacerbated an already uncertain lettings market, leading to an increase in the number of landlords requesting tenants to name a guarantor.
“As rents continue to rise out of line with wages, more tenants are having to spend a larger portion of their salaries on rent.
“When you add to this the increasing lack of rental properties available at the moment, tenants are needing to stretch their budget further to secure properties, again causing landlords to seek out the extra level of security, provided by guarantors.”
He added: “While the number of tenants being asked to provide a guarantor has risen in most regions across the UK, notably in the South West, Greater London however has seen a decrease.
“This could be reflective of how the London property market is becoming more expensive and competitive.
“Often tenants in London are offering to pay more up front as a means of securing a property, giving landlords another sense of security to their means outside of guarantors.”
Mr Richmond pointed out: “Naming a guarantor can be a positive thing to enable a greater spectrum of tenants to access housing, but it can add complications to the rental process and is something that should only be requested when genuinely needed, lest we create unnecessary barriers to entry in an already competitive rental market.”
The breakdown of regions that shows the proportion of tenants needing a guarantor:
Region 2021 2022
East Midlands 11% 12%
Greater London 9% 8%
North East 15% 16%
North West 18% 20%
South East 12% 16%
South West 15% 28%
Wales 16% 20%
West Midlands 11% 13%.