Will I need a guarantor?

Javens

I'm in my mid-20s and looking at moving out of my parents' house to get some independence, however I am concerned about the process of renting, and whether I would be accepted by a letting agent.

My parents assist me (as I have a disability) so I would only move local. I'm looking at a studio, which cost around £750-£780 a month in the local area.

I'm employed full-time, started in Jan 2017, and received a promotion 6 weeks ago, so my salary is now £1700/month (after tax/NI/student loan deductions/pension) and I receive £550/month PIP. My outgoings are a £40 phone. No debt etc.

Do I earn enough to be accepted for a £750-£780 rental?
As I have not rented before (apart from at university about 5 years ago), is this going to cause problems as I wont have a reference?

My main concern is I do not want to put anyone in a position to be a guarantor for me, I want to do this myself.

SuboJvR

Javens wrote: »

I'm in my mid-20s and looking at moving out of my parents' house to get some independence, however I am concerned about the process of renting, and whether I would be accepted by a letting agent.

My parents assist me (as I have a disability) so I would only move local. I'm looking at a studio, which cost around £750-£780 a month in the local area.

I'm employed full-time, started in Jan 2017, and received a promotion 6 weeks ago, so my salary is now £1700/month (after tax/NI/student loan deductions/pension) and I receive £550/month PIP. My outgoings are a £40 phone. No debt etc.

Do I earn enough to be accepted for a £750-£780 rental?
As I have not rented before (apart from at university about 5 years ago), is this going to cause problems as I wont have a reference?

My main concern is I do not want to put anyone in a position to be a guarantor for me, I want to do this myself.

Yep I think you'll be fine. I'm not sure what kind of affordability criteria people use these days but if you have over £2000 coming in after deductions, that's plenty. I think historically people talked about 30x the rental to give the annual salary, which would be before deductions.

The only stumbling block you may have is not having a reference for previous rentals, so they may perhaps want an increased deposit in light of this, or something along those lines. Perhaps a letter of recommendation from your employer may help? Or it may be they would request a guarantor for that, which would be unfortunate but perhaps if your parents were able to do this for you initially, say after a year of good tenant behaviour and on time rental payments the agent/landlord may withdraw that requirement.

Javens

SuboJvR wrote: »

Yep I think you'll be fine. I'm not sure what kind of affordability criteria people use these days but if you have over £2000 coming in after deductions, that's plenty. I think historically people talked about 30x the rental to give the annual salary, which would be before deductions.

The only stumbling block you may have is not having a reference for previous rentals, so they may perhaps want an increased deposit in light of this, or something along those lines. Perhaps a letter of recommendation from your employer may help? Or it may be they would request a guarantor for that, which would be unfortunate but perhaps if your parents were able to do this for you initially, say after a year of good tenant behaviour and on time rental payments the agent/landlord may withdraw that requirement.

Thanks for your reply. While I could ask my parents to be a guarantor, it's not something I want to do. I'd much rather offer a higher deposit.

What would be an acceptable amount to offer?

I was thinking 2 months deposit (instead of 1 months), plus 1st months rent, and an optional 6 month break in the contract if the landlord felt this was necessary?

SuboJvR

You're definitely on the right lines but, different letting agents probably have their own policies. So I would be prepared for the above ideas, but don't lead with it - it may not be necessary so don't offer unless they ask! :-)

If you end up dealing with a landlord direct then it may be a bit more open to negotiation, no strict policies to follow on the landlord/agent's part and getting to know you and your circumstances on an individual basis may be all they need :-)

ScorpiondeRooftrouser

I realise you want to do this yourself but in the worst case scenario, let's say you lost your job and couldn't afford the rent.

Would you parents step in and help you out by covering it until you could end the contract, or would they let you get taken to court; get judgements against you, etc?

If it's the former then they might as well be your guarantor. I would happily stand as guarantor for my children simply on the basis that I know I would pay the money, without expecting it back, if they were in genuine difficulty.

Javens

ScorpiondeRooftrouser wrote: »

I realise you want to do this yourself but in the worst case scenario, let's say you lost your job and couldn't afford the rent.

Would you parents step in and help you out by covering it until you could end the contract, or would they let you get taken to court; get judgements against you, etc?

If it's the former then they might as well be your guarantor. I would happily stand as guarantor for my children simply on the basis that I know I would pay the money, without expecting it back, if they were in genuine difficulty.

My parents are home owners and employed, however they couldn't afford to pay the rent even if they were accepted as guarantors, which is why I wouldn't want to put that bourdon on them.

I have roughly £6k in savings. If there was a 6 month break in the contract, this would cover both myself and the landlord. If I lost my job, I'd pay the rent using savings until the 6 month break then leave.

Maybe I need to wait a few more months before moving out, to save up more...

SuboJvR

Javens wrote: »

My parents are home owners and employed, however they couldn't afford to pay the rent even if they were accepted as guarantors, which is why I wouldn't want to put that bourdon on them.

I have roughly £6k in savings. If there was a 6 month break in the contract, this would cover both myself and the landlord. If I lost my job, I'd pay the rent using savings until the 6 month break then leave.

Maybe I need to wait a few more months before moving out, to save up more...

I don't think so. I think you have been very thoughtful about it all and you have a good methodical approach. No one can predict the future, letting agents and landlords don't expect that of anyone. Letting agents/landlords work to the lowest common denominator - they get so many time wasters, or people who don't respect properties, or who cram 8 people into 2 bedroom homes. They have strict rules to cover these things; reasonable, respectful people can be like gold dust to landlords with previous bad luck!

Perhaps with putting so much thought into it you are talking yourself out of it before trying. There's no harm in trying and seeing (may lose a couple of hundred in reservation fee I guess) - if they do require a guarantor, then say no, you can provide an employer and character reference instead. If they don't want to let to you, fine, then you know for sure and know what the local agents would require.

ScorpiondeRooftrouser

Just a suggestion, and IF they won't accept you without a guarantor, then give £4200 to your parents for six months and you and they together can use that to cover the rent if they have to? Then once it goes back onto a rolling one month contract (if this still happens, I haven't rented for a while) then they give it back to you. Just an idea.

pmlindyloo

Just a thought.......

It is sometimes cheaper to rent a two bed property and share the rent/utility bills, council tax etc. with a friend.

This may not be for you or you may not know anyone (choose with care, obviously and make sure you have separate tenancy agreements so you are not liable for the whole rent. )

Is this a possibility?

You also need to think long term. If you had the studio option I am sure you can manage but there will not be much 'wriggle room' if you want to start saving for your own place and enjoy 'life'. Sharing might be good socially and might allow you to save.

Both comes with pros and cons!

'Go for it', I say - you have a safety net of savings and a place to go back to if everything goes 'belly up'.

Javens

pmlindyloo wrote: »

Just a thought.......

It is sometimes cheaper to rent a two bed property and share the rent/utility bills, council tax etc. with a friend.

This may not be for you or you may not know anyone (choose with care, obviously and make sure you have separate tenancy agreements so you are not liable for the whole rent. )

Is this a possibility?

You also need to think long term. If you had the studio option I am sure you can manage but there will not be much 'wriggle room' if you want to start saving for your own place and enjoy 'life'. Sharing might be good socially and might allow you to save.

Both comes with pros and cons!

'Go for it', I say - you have a safety net of savings and a place to go back to if everything goes 'belly up'.

Thanks for all the replies.

I did consider moving in with a friend, and I've done this before years ago, but I just feel I want my own space now.

While moving into a studio at £750-£780 is going to eat away a large chunk of my income, I'm optimistic it wont be forever. I'm currently on an evening course (funded by my employer), and working towards moving up the ladder at my current employment.

I could stay living with my parents, where I currently pay £400/month rent, but I don't want to be a 30 year old living in my parents' basement (any Dave Ramsey fans out there... ).

ScorpiondeRooftrouser

I would personally rather give a large sum of money to my parents to hold to cover their risk as a guarantor than give a large sum of money to a landlord to hold to cover his risk. I'd have a lot more confidence in getting it back from my parents. Other people's circumstances may of course differ.