A landlord might also say you need a guarantor to rent their property if you live on a low income or have poor credit history.
People who pay part of their rent using benefits, such as universal credit or housing benefit, are more likely to have to find a guarantor. You could also be asked for one if you can’t provide any references from your previous landlord.
You’re more likely to have to find a guarantor if you haven’t been with your current employer for longer than six months.
Even if you don’t fall into any of these categories, the guarantor requirement is at your landlord’s discretion – so you could still be asked for one.
Any costs accrued from putting in place a guarantor, such as credit checks or paperwork, must be paid by the landlord and not the prospective tenant.
Guarantor requirements can result in people losing out on homes, particularly marginalised people.
It’s a significant barrier to housing for care leavers, who are less likely to have well-off relatives supporting them. That’s why Mary-anne Hodd, a care-experienced teacher based in Newquay, founded The Guarantor Scheme. The initiative – which has helped more than 400 young people secure privately rented homes – has councils acting as guarantors for those making the transition from foster care to independent living.
“I was met with this kind of ‘computer says no, we don’t expect you to rent privately, we expect you to move into council housing or supported accommodation’,” Hodd said of her own experience leaving care.
“I still get emails every single day from young people that are either using the scheme or need the scheme,” she added.
“The stigma that surrounds us is very limiting in terms of the routes out and what’s expected of us. But part of the journey of care should be that we have high aspirations for our young people. And it should be that we provide the same opportunities for them as for the general population.”
Guarantor agreements
As well as being liable for any rent you don’t pay on time or in full, your guarantor can be held responsible for other expenses such as property damage if you can’t or don’t pay it.
It all depends on the details in their contract with your landlord, which sets out the terms all parties are agreeing to.
Once someone has signed an agreement to be a guarantor, they have legally agreed to be responsible for any payments due. That means that if you can’t pay rent, and your guarantor then doesn’t pay, they can be taken to court.
When can a guarantor be asked to pay?
There’s no minimum time after a missed payment that a landlord must wait before they contact your guarantor, unless specified otherwise in your contract. If you fail to pay your rent, the landlord can speak to the guarantor the following day.
Your landlord might tell you in advance that they’re going to do so and give you a chance to pay what you owe first, but they’re not legally required to let you know.
A guarantor should speak to you after your landlord contacts them and before any payments are made, to ensure that the details of what’s due are correct and to be made aware of any other problems.
If neither the tenant nor the guarantor pay money owed as agreed, the landlord can apply for legal action against one or both of you. This would be a country court judgement (CCJ) in England and Wales, or a decree from your local sheriff court in Scotland.
How long does a guarantor agreement last?
The length of time your guarantor is liable for depends on what’s agreed with your landlord.
Some might be limited to the period covered in your contract with your landlord, as a tenant. But while most tenancies are fixed-term, guarantor agreements are often indefinite and will still apply if you extend your time in the property.
Check the guarantor agreement for terms on what else could end their liability. This can sometimes include changes such as rent increases for the tenant.
It’s crucial that both you and your guarantor read all the paperwork and are certain about these details before signing anything. If you’re unhappy with the terms set out, try negotiating with your landlord before anything is made official.
If your guarantor doesn’t want to be liable beyond the end of your fixed term tenancy, they must make that clear to your landlord ahead of the signing of any agreements – and make sure that’s confirmed in the contract.
Who can be a guarantor for renting in the UK?
Most people ask family members or close friends to be their guarantor, but there are no set rules for what your relationship must be to a prospective guarantor. You have to feel comfortable sharing with them the legal details, contracts and financial circumstances associated with your tenancy.
They can be a spouse or a partner, but they must have a separate bank account from you.
Self-employed people can be guarantors but will likely need to provide proof from an accountant that they have the necessary funds or income.
Does a guarantor need to be working?
People who are retired can be guarantors but will need to go through the same checks. They must prove that they have enough regular income to cover any payments they might be liable for.
Their income and funds might be assessed according to state or private pensions, savings, pension drawdowns or other assets.
Does a guarantor need to be a UK resident?
Landlords almost always require that a guarantor lives in the UK. It means it’s easier for them to check things like bank statements, references and credit history, as well as it being more straightforward for them to take a guarantor to court if necessary.
If you can’t find a UK-based guarantor, you might be able to negotiate with your landlord by agreeing to pay more rent in advance to compensate.
This can be particularly tricky for international students coming to study in the UK who don’t have relatives or a support network here. Try asking your university about how they can help – there might be funds available to help students which could go towards an advance on rent, or they might hold a list of local landlords who don’t need you to have a guarantor.
What do guarantors need to provide?
Your landlord will likely do a credit check on the person who is agreeing to be your guarantor, as well as asking for documents such as bank statements to check their income and savings is sufficient to cover any payments in future. The amount they need to be earning depends on your rent and how much money your landlord would need to recover if you missed payments.
They might also ask for a job reference and require that your guarantor is a homeowner but, like much of the process, it comes down to what your landlord decides.
What are the risks of being a guarantor for rent?
The primary risk of being a guarantor is simple: money. They could be forced to pay out thousands whether it be for rent, property damage or legal fees. This won’t change if the relationship between guarantor and tenant breaks down during the time covered by the guarantor agreement.
It’s important to understand the implications of being a guarantor for someone in a joint tenancy agreement, too. If there are multiple people renting one property, each tenant is responsible for the entirety of the rent, not just some of it – so if someone doesn’t pay their share, other tenants might have to pay extra to compensate.
The principle for guarantors is similar. Acting as a guarantor for one tenant effectively means being liable for all of them. This only changes if an agreement is made with the landlord ahead of time and put in writing.
Does being a guarantor for rent affect your credit?
Just being a guarantor won’t impact a person’s credit score. But if the tenant misses payments and the guarantor struggles to pay on their behalf, this can drive credit rating down.
If a guarantor fails to cover what a tenant owes, a landlord could ultimately take one or both parties to court. Having a CCJ or decree against you, which means a court has ruled you have to pay, can damage your credit score too.
Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.
