If you’ve ever rented in the UK before, you may have been asked to provide a rental guarantor. But what exactly is a guarantor? And why are some people asked to provide one and others not?
To answer all these questions and more, we spoke to James and Dani at Housing Hand. This is a UK company that specialises in providing a guarantor service.
What is a rental guarantor?
A rental guarantor is someone who legally agrees to cover the cost of your rent if you can’t pay it. It’s a big responsibility, so people commonly ask their parents, or a close relative.
Why might I need a rental guarantor?
When applying to rent a property in the UK, a landlord or letting agent will run two checks. One is an affordability check, where you provide proof of your income. The second is a credit check.
A common measure of ‘affordability’ is whether you earn three times the monthly rental amount (before tax and deductions). And a good credit score relies on you having a solid history of using financial products, like credit cards and phone plans.
But when you’re new to the UK, it’s common to have a low credit score. This is because UK credit scores are only based on financial information from UK companies only - so there will be very little information about you on file.
So if your credit score is in need of a boost? Or you don’t earn three times the rental amount? You may be asked to provide a guarantor – or provide many months of advance rent.
Who can be a rental guarantor?
Not just anyone can be a rental guarantor. A person usually needs to meet a strict set of criteria such as:
- Live in the UK
- Be over 18
- Pass the affordability check
- Be a homeowner or have savings
- Have a good credit score
Understandably, it’s often difficult for those who have just moved to the UK to find an appropriate rental guarantor. That’s where Housing Hand can step in.
How does a Housing Hand rental guarantor work?
We spoke to James and Dani to explain.
“If there’s no one who can be your guarantor, Housing Hand can provide this service for a monthly or annual fee. We can accept an application around 99% of the time.
If you need a guarantor because you don’t earn three times the rental amount, there’s still a good chance you will be accepted by us. We only require you to earn 1.5 times the rental amount, rather than the three many lettings agents ask for.
We also don’t require a credit check.
After your application is complete, Housing Hand will then confirm to your accommodation provider that we are acting as your rental guarantor.
We have a payment structure spread over 12 months. The monthly fee is usually roughly equivalent to one month’s rent over that time. So say someone pays £1200 a month for their rent – our fee will be around £100 per month. We also give a 10% discount for an up-front annual payment.”
As an ethical company, Housing Hand will also advise you on other potential guarantors.
“If we think you don’t need us, we’ll always tell you,” confirms James. “As some people will have family members in the UK who meet the criteria and not realise they can ask them.”
Need a rental guarantor?
Marshmallow customers can save up to 25% on a Housing Hand rental guarantor. Want to find out more? Read about Marshmallow Perks here.
