Acting as Guarantor

bottletop

My 21 year old son is off to do a post-graduate course and renting a flat with his girlfriend. Very nice - but what's with all this "Guarantor Agreement" I'm supposed to have to sign?

I appreciate I'm probably way behind the pace on this, but in my day if people wanted to rent out flats to young people/students then they made that choice with all its potential risks and advantages and priced it accordingly.

Nowadays it would appear they want the advantages but not the risks. I am the one who is to all extents and purposes renting the flat, its just that my son will be living there.

Anyway, despite my grumbling, I more or less get my head round this concept and obviously don't want to let the lad down - but then the form arrives!!

My income; my employers details and my payroll number; my wife's maiden name; my bank sort code and account number; any other savings or income I may have.

It all sounds a bit much doesn't it, or is this usual?

Quite frankly, if it was up to me I'd just give them my name, address and telephone number and tell them to take it or leave it. I'm acting as guarantor in their interest. I stand to gain nothing from it, and I don't particularly feel any great need to have to prove myself to them.

Is this an unreasonable attitude to take or will it scupper my son's deal?

Thanks for any feedback.

undaunted

In short I'd say no and yes!

IE No I don't personally think your attitude is unreasonable but yes the landlord will probably not want to go ahead without you complying. As far as he / she is concerned they don't want to take a risk on your son they just want their money & if son defaults they "need" or rather want to know that you have the means to pay it should they have to pursue you for his rent instead.

You / Your son are of course free to see if you can find a landlord elsewhere who doesn't want you to stand guarantor / so much information should you wish to do so.

Jowo_2

bottletop wrote: »

..
I appreciate I'm probably way behind the pace on this, but in my day if people wanted to rent out flats to young people/students then they made that choice with all its potential advantages and priced it accordingly.

Landlords have never priced properties according to what the tenant can afford but for whatever the market rate is - it's up to the tenant to find a property whose rent they can afford rather than the landlord accommodate them.

Probably when you were a lad/lass, it was completely untenable for a full time student and their unmarried partner to secure self-contained accommodation. They would have stayed at home, had a flat share/lodgings or lived in student accommodation. That your son has a lifestyle expectation is not the landlord's problem.

The request for guarantors is generally made when tenants are a riskier proposition, such as low income, student, benefit claimant and is pretty much the main way that a landlord can mitigate the risk of ending up with a non-paying tenant who trashes the place.

bottletop wrote: »

..


My income; my employers details and my payroll number; my wife's maiden name; my bank sort code and account number; any other savings or income I may have.

It all sounds a bit much doesn't it, or is this usual?

.

It's usual. It's to help identify if you can afford the rent if you son defaults - no point in having a guarantor who is broke. Also, the info there helps to trace a guarantor who tries to evade their responsibilities, making them easier to find and enforce any arrears.

It's fairly common for a guarantor to be credit checked to prove their ID, their income and check if they have any CCJs. Again, no point in the landlord having someone under writing the rent who has a history of not paying creditors or no income to do it.

If you don't like it, then withdraw and tell your son to find accommodation that doesn't put his responsibilities back onto you or ask his girlfriend's parents to do this. If the girlfriend has sufficient wages to pay the rent on her own, then she could always ask for a tenancy in her sole name. Plenty of posters come onto this forum rueing the day they agreed to be a guarantor for a close relative or friend.

alexia75

Sounds a bit much to me. When I took on my first private rented flat with my boyfriend, we were just finishing up our post-graduate degrees and so needed guarantors. From memory, the LAs requested, and were given, our parents' names, addresses, place of employment and annual salary.

However, I admit we only needed to provide guarantors that one time so it may be that other LAs/LLs would require more info. As with all of these things, sometimes it's a matter of weighing up the information requested with how much you want the flat.

princeofpounds

Probably when you were a lad/lass, it was completely untenable for a full time student and their unmarried partner to secure self-contained accommodation. They would have stayed at home, had a flat share/lodgings or lived in student accommodation. That your son has a lifestyle expectation is not the landlord's problem.

Wondering how old you are Jowo... just because of you classing private renting whilst at university as a 'lifestyle expectation'. I wouldn't be surprised if this is 'student accomodation' in terms of quality or 'a flatshare' where the sharers happen to be a couple.

Official student accomodation in all but the richest universities is now largely for first year students and foreigners only so everyone else does private rent, and not all private rents are multiple bedroom properties.

Also, don't forget a postgrad in a decent subject like science or engineering often gets funding, which is tax free, and can supplement their income by taking seminars or tutorials.

NEH

Guarantor's are the norm these days...

Even now when my hubby and I were looking for rental properties one agency still wanted a guarantor for me as I'm not working due to my ill health. It didn't matter that my husband was working full time or that i get a small medical pension :eek:


They also wanted to credit check my guarantor as well and said they had to be earning over £22K....

Some are more rigorous than others mind you.

Jowo_2

princeofpounds wrote: »

Wondering how old you are Jowo... just because of you classing private renting whilst at university as a 'lifestyle expectation'. I wouldn't be surprised if this is 'student accomodation' in terms of quality or 'a flatshare' where the sharers happen to be a couple.

The OP is mentioning something along the lines of a guarantor not being the norm in 'their day' but the practice of asking for a guarantor is nothing new.

Unless I've misunderstood the phrasing "if people wanted to rent out flats to young people/students then they made that choice with all its potential risks and advantages and priced it accordingly", they are referring to an apparent historic practice of landlords pitching their rent to the tenants income. Again, that's not one that I've ever come across.

Tenant: "I'm a student"
Landlord: "ooh, in that case you belong to a category of tenants that are unpopular and considered more risky. I'd best reduce the rent so that there is less likelihood of you getting into arrears rather than restrict the tenancy to professionals. I'd hate to transfer the risk to your relative."

bottletop

Thanks for your input, Jowo, but I can't for the life of me see how you read that interpretation into my words.

It's nothing at all to do with "social pricing", I mean that the landlord would consider the hassle/reward scenario of renting to students and set a rent that he thought was worth his while.

There are advantages to letting to students. A fresh never-ending supply of new short-term tenants with no long-term expectations; relatively unsophisticated financially; willing to expect and accept far less; and prepared to multi-occupy in a way other tenants may not.

There are obvious drawbacks with lack of income and security - but with a guarantor system it would appear the landlord is getting the best of both worlds.

N79

bottletop wrote: »

It's nothing at all to do with "social pricing", I mean that the landlord would consider the hassle/reward scenario of renting to students and set a rent that he thought was worth his while.

However, this is not true for Students (as with housing benefit Ts) in that a LL can not price for the risk as there is a top limit on rent pricing (a percentage of student loans for students, LHA rates for benefit Ts). This means that in practice the LL is unable to charge the correct rate for the risk.

Therefore, and very logically, instead they seek to reduce the risk. The classic risk reduction method of tight referencing does not work well for average students because of a lack of history so LL's have taken to using guarantors to achieve the necessary cost / risk balance.

Edit: A lot of this need to balance the cost / risk balance comes from the need to maintain ROI for student LL's. The combination of the explosion in student numbers with HMO licensing (which almost guarantees that no properties can be converted to student residents) has driven house prices in student areas very high as it has throttled supply. Paradoxically this has reduced the risk that student LL's can carry because of the cap mentioned above on student rents.

bottletop

Cheers, N79, this is all news to me.

poppysarah

Do you understand what guarantor means?

It means they come to you for the rent and damages if any happen. If means that should your son leave and split with his gf you'd possibly be paying her rent. Not saying it would happen, but think of all possibilities.

Say no!