If you are renting in the UK, you may need a guarantor. This
is a common requirement by landlords and letting agents. But what is a
guarantor and why would you need one? We answer these questions and more below.
What is a rent guarantor?
As the name suggests a guarantor is someone who provides a
guarantee. In this case your guarantor promises to pay the rent and any other
costs if you're unable to do so. This means if you don't pay the rent at the
end of the month the landlord can ask the guarantor to pay it.
Why would I need a guarantor?
A landlord or letting agent will ask you to provide a
guarantor if they feel there may be a risk you won't be able to pay the rent.
This may be because you haven't rented before, are young or a student. Foreign
students studying in the UK will almost always require a guarantor. This could
also be the case if you're unemployed or on a low income. You may consider this
to be a little unfair. But the landlord is looking for a guarantee they’ll
receive the rent.
What are the drawbacks to being a guarantor?
It’s easy for the person acting as guarantor to overlook
what they’re actually committing to. But being a guarantor is a very real
responsibility. And it comes with a potentially large financial burden.
A guarantor is ultimately responsible for any money you owe
the landlord. This is usually rent arrears but could include costs for damages
and even legal
fees. There’s also another factor which many tenants and guarantors are
unaware of.
Joint tenancies, in student
housing for example, can present extra issues. Your guarantor becomes
responsible for every tenant in the property. And that includes rent arrears. Understandably
this could come as a big shock to your guarantor.
Who can be a guarantor?
A guarantor must be based in the UK and is usually a family
member, most often a parent, but friends can also fulfill the role. If you're
asked to provide a guarantor you should consider carefully who you'll ask. It
needs to be someone you're comfortable with and there must be trust between
you. After all you're asking your guarantor to potentially make a serious financial
commitment. If you don't pay the rent or cause damage you can't pay for, your
guarantor will be legally responsible for the costs. This is why you need to
carefully consider who you ask to be your guarantor.
Finally, your guarantor should be aware the landlord or
letting agency will perform a credit check. This can impact on the guarantor’s
credit score. And, of course, if your guarantor doesn’t pass the credit check
you’ll need to ask someone else to take on the role.
How to find a guarantor
Most tenants, especially young renters such as students,
will look within their immediate family. Parents are the obvious choice as a
guarantor for most young renters. But what if you can’t find someone or you
don’t want to impose on a family member? Or what if you’re an overseas student
with no UK based family?
Fortunately, there are companies that will act as a
guarantor for you. They fulfill the same role as an individual or family member
would. However, as you would imagine you’ll need to pay a fee for this service.
Costs vary but usually start at around £250.
You do need to provide proof that you’re a student along with photo ID.
Your letter of acceptance from the university and your passport will be fine.
You’ll still require a co-signer, but this person won’t be
credit checked. However, do carefully read the terms and conditions. The
co-signer will still have financial obligations and they may have to pay the
rent if you don’t.
Nevertheless, using a specialist company is a great way for
anyone to secure a UK guarantor. But students aren’t the only tenants who can
use these services. Graduates and employees can also use a guarantor company.
If you’re in this category all you need to do is provide an employer’s letter
and wage slips (your monthly income needs to be 2.5 x the rent). The same fees
apply.
Needing a guarantor may put off some tenants from applying
for a property. But the rise of specialist companies providing this service
means everyone can find a UK guarantor if needed.
Tenants can find their ideal property faster with MakeUrMove the online letting platform
bringing landlords and tenants together.
