Guarantors - options?

x1x1

Hi all,

Long story short, my current landlord of 5.5 years wants to sell the flat and gave me 2 months notice approx 1 month ago.

Since then I've found another place and after doing "referencing" they have come back to me saying I need a guarantor.

I'm self-employed, earning around 22k a year. They asked for 6 months bank statements and a reference from current landlord/agency which have been supplied.

They are insisting I have a guarantor, which I simply cannot provide them with. I find it a little insulting as I am 33 and they are effectively telling me I'm not suitable to rent a flat on my own.

I've yet to find out why I need one, but I suspect it's to do with my *personal* bank statements which show very little activity other than paying rent and bills, so I dont pay too much into it. I put spare money in savings and a certain amount aside for the unexpected.

As an "option" they said I can pay 6 months upfront, but then told me this will be set aside and I will have to pay monthly as normal and I get this 6 months at the end of tenancy.

This is a £650 a month rental, should it really be so hard to rent?

Do I have any other options?

Fire_Fox

Being insulted is silly, this is a business decision. You are self employed, if you find yourself unable to work/ earn (eg. illness or injury) you are not entitled to the same state benefits as someone who is employed because you pay different NI contributions. Plus many types of self employment are not as stable as employment in a recession.

Not sure I understand what you are saying about your personal current account and not paying much in. If you earn £22K then you should be paying yourself £22K, doesn't matter whether you spend or save it thereafter. If they cannot see £22K going in, then they may think you are inflating your income.

Have you checked your files held by the three credit reference agencies for any errors? Are you on the electoral roll, do you have any credit accounts such as a mobile phone contract?

BitterAndTwisted

If there's not much in the way of funds going into your current account then you need to supply them with a copy of your savings account statements.

If you have a decent credit-file then they are making their decision on AFFORDABILITY based on the income they can see on your current account. Bear in mind that agents and landlords need to see the rent as a percentage of your income.

DO NOT pay them six month's rent as a deposit. If you have to come up with that sort of money then it must be six month's rent paid in advance.

x1x1

Fire_Fox wrote: »

Being insulted is silly, this is a business decision. You are self employed, if you find yourself unable to work/ earn (eg. illness or injury) you are not entitled to the same state benefits as someone who is employed because you pay different NI contributions. Plus many types of self employment are not as stable as employment in a recession.

If I was unable to work I have considerable savings to back me up (which is partly why I only earn 22k). Apparently this doesn't matter though when being assessed.

Fire_Fox

x1x1 wrote: »

If I was unable to work I have considerable savings to back me up (which is partly why I only earn 22k). Apparently this doesn't matter though when being assessed.

Presumably it was your income and your credit history that was assessed: there is nothing stopping you spending all those savings tomorrow on a fast car or on business debts. Don't really see what the problem is with paying six months up from if you have considerable savings? Obviously protect yourself, see the sticky on consent to lease and ensure your deposit is lodged with one of the three schemes promptly.

theartfullodger

You don't HAVE to rent any particular property if you don't want to, and you can make your own conditions (which the landlord may or may not agree to..)..

The landlord doesn't HAVE to rent any particular property to you if he doesn't want to (discrimination legislation excepted), and LL can make his own conditions (which you the prospective tenant may or may not agree to..)..

The Landlord may well be thinking (well I would anyway..) that it is MUCH easier to "attach earnings" of a PAYE debtor that anyone self-employed... (should you bizarrely fail to pay your rent - yes I realise this will never happen & your business will never fail & the economy will never slump even further..) so wants the extra re-assurance of a guarantor..

Sorry, part of the many disadvantages of an allegedly "free market"...

Cheers!

rpc

x1x1 wrote: »

As an "option" they said I can pay 6 months upfront, but then told me this will be set aside and I will have to pay monthly as normal and I get this 6 months at the end of tenancy.

That sounds rather like a premium http://www.landlordlawblog.co.uk/2010/06/28/why-can%E2%80%99t-tenancy-deposits-be-for-more-than-two-months-rent/

x1x1

interesting links, thanks

pinkshoes

x1x1 wrote: »

As an "option" they said I can pay 6 months upfront, but then told me this will be set aside and I will have to pay monthly as normal and I get this 6 months at the end of tenancy.

I'd take this option! If they're setting it aside, then it's a DEPOSIT, and they will have to protect it in one of the deposit schemes.

(and if they fail to do this, you can take them to court for 3x the amount, so will make a pretty profit!!).

They just want a hefty deposit incase you're out of work, so they can evict you and have enough money to cover any unpaid rent during that time.