Most people who rent houses are responsible for their own rent. However, some tenants are only able to rent a property if someone else – usually a parent or friend – guarantees that the rent will be paid. This person is called the rent guarantor. In this blog, we look at why some of Guildford’s tenants need a guarantor and how the process works.

What is a rent guarantor?

A rent guarantor is someone who will pay your rent if you can’t. The tenant and the guarantor are jointly responsible for the rent. When the rent is due, the tenant is expected to pay it. If they cannot pay it, the responsibility falls to the guarantor. 

In some cases, the rent guarantor would also be asked to pay for any damage to the property. This would be detailed in the guarantor agreement. 

Who needs a guarantor?

Anyone who cannot prove they can cover their own rent needs a guarantor. This is usually picked up during the referencing process. 

When we ask for details of your income, we are looking to see if you earn enough money that you could pay the rent each month, after you’ve fed yourself and paid your bills. Ideally, a tenant should earn three times the monthly rent. So, if the rent is £1000 per month, referencing must prove that the tenants earn at least £3000 per month between them. If the sums don’t add up, we will ask you to provide details of someone who would be able to meet your rent responsibilities if you could not. 

You might also be asked to provide a guarantor if you have never rented before. To help landlords avoid issues of unpaid rent, estate agents have to check whether you have defaulted on rent in the past. If you have never rented before, we have nothing to check against, so we have to ask you to provide a guarantor instead. 

Some people have a poor credit history, which may be because they’ve defaulted on loans or just because they’ve never had a credit card. People with poor credit history usually need a rent guarantor. 

I believe I can afford the property – why do I need a guarantor?

Often, asking for a guarantor is a formality and they never have to make a payment. 

For example, you might have savings to add to your income to enable you to cover the rent. However, your savings are not part of your income so not all referencing agencies or Landlords will count them during the referencing process. In this situation, you would still need someone else to act as rent guarantor.

Who can act as my rent guarantor?

A guarantor must be a UK resident aged between 18 and 75. They must have a good credit history and be able to afford the rent. Ideally, they should be a homeowner but this is not a legal requirement. 

Your rent guarantor is usually a parent, relative or friend. Remember that if you do default on the rent, they will be paying it for you, so consider whether your relationship with the person you nominate would survive that situation. 

There are also third-party guarantor companies who will fulfil the role for an annual fee. 

Do guarantors have to go through referencing?

Yes. Your landlord and estate agent need to satisfy themselves that your guarantor could cover the rent should the need arise. Guarantors have to provide evidence of their income in the same way as tenants. 

Understanding the guarantor agreement

Once the guarantor has passed the referencing process, they need to sign a guarantor agreement. This is legally binding. Details can vary so it is important that the guarantor understands what they’re signing up to. 

Usually, the guarantor shares responsibility for the rent for the whole property, so if one tenant – not necessarily related to the guarantor – falls behind with rent, the guarantor may still have to pay. It is important that the guarantor is either willing to do this, or that the agreement states that they only have to guarantee the rent for one particular tenant. 

The guarantor is usually asked to sign the tenancy agreement too. 

If you’re ready to rent property but your income doesn’t pass referencing, a rent guarantor is the answer. It is vital that the rent guarantor understands what they’re signing up to in case they are asked to pay the rent. 

Letting property in Guildford

If you have any questions about the rent guarantor process or anything else about letting property in Guildford, please get in touch with the Cobbles team on 01483 457 000.