Is it common for landlords of BTL houses to insist on a guarantor?

henrik1971

Friends of ours have been looking for a four bedroom house to rent, but everytime they find one and view, they are told that a guarantor is necessary - even before their financial position/capability has been touched upon.

Is this normal? Our friends don't have parents who are still alive or close family to ask to stand as guarantors. Even if they did - its a big thing expecting someone to guarantee such a potential liability.

Is this normal practice? If so, I'm wondering how other people are managing and who all these guarantors are...?

Chrysalis

I would say its common but not every landlord asks for it, also it could be a LA asking for it without the landlord requesting.

They not even asking for credit, I think its a very cautious attitude to take, literally not willing to take "any" risk at all. But this is what happens in a market where there is under supply, the suppliers can take the mickey.

For reference my landlord still wants a guarantor from me on tenancy renewals even tho I have been his tenant for 17 years and not missed a single rent payment. The only way I could avoid it I was told was to pay the year's rent up front.

My dad is my guarantor, he refused my sister a few years back, but still does it for me as he also knows for the past 17 years he has never been asked to cover my rent. He is now in his 70s tho, so doesnt really have much of an income now and obviously wont be around forever. Also on the last renewal they insisted my mother signed it as well, so have actually got even stricter, my landlord now also requires guarantors to be homeowners as well, its getting ridiculous.

Its easier to get 30k of credit than a 10 month tenancy agreement.

ognum

As a LL I only ask for guarantors if a persons income is below the threshold for the rent.

I only let in an expensive area to progressional, both houses and flats. My one tenant currently who has a guarantor is a single lady who has been working abroad and is self employed who had no earning history in the last two years in the U.K. but has an established job she moved to the U.K.

I wonder if your friends are giving of hints that they actually can’t afford the property?

PasturesNew

An increasing number do. Once one lot of LLs or agents see others doing it, they do it for no good reason other than "they can".

I'd not be able to come up with a guarantor ... I could "technically" call upon two siblings, who would meet financial criteria, but why should I have to "go begging" to siblings who have never had any financial interest in my life, and who I see only once every 2-3 years to take a full and final responsibility for my choices and spending? That's simply outrageous and rude.

Indeed .... I wonder if somebody could call on an "ageism" ruling here as "people who are older are less likely to have parents to call upon to sign away their life on a piece of paper" and/or "more likely to have elderly parents reliant only upon state pension so invalid for guarantor purposes due to insufficient income".

Let's call the ageism rule, eh!

GreenSnake

PasturesNew wrote: »

An increasing number do. Once one lot of LLs or agents see others doing it, they do it for no good reason other than "they can".

I'd not be able to come up with a guarantor ... I could "technically" call upon two siblings, who would meet financial criteria, but why should I have to "go begging" to siblings who have never had any financial interest in my life, and who I see only once every 2-3 years to take a full and final responsibility for my choices and spending? That's simply outrageous and rude.

Indeed .... I wonder if somebody could call on an "ageism" ruling here as "people who are older are less likely to have parents to call upon to sign away their life on a piece of paper" and/or "more likely to have elderly parents reliant only upon state pension so invalid for guarantor purposes due to insufficient income".

Let's call the ageism rule, eh!

I don't think you could call it ageism, as guarantor could be anyone, doesn't have to be parents.
Plenty of children act as guarantor for their parents, it works both ways.

I personally don't like the way it has crept into student lettings, because I think it's divisive. It's probably better termed as "classism", rather than "ageism".

That's what we need, another "ism" !

Chrysalis

My landlord's primary market is students, which probably explains why he does it given greensnake's comment. Not all his tenants are students tho, but the policy I have been told by his staff and himself applies to every tenant regardless of their income, employment status etc.

GreenSnake

Chrysalis wrote: »

My landlord's primary market is students, which probably explains why he does it given greensnake's comment. Not all his tenants are students tho, but the policy I have been told by his staff and himself applies to every tenant regardless of their income, employment status etc.

I'd do the same, if I was a landlord.
There's no downside for them, if the tenants will actually provide guarantors.

Cakeguts

We do if the tenant has a satisfied CCJ or other type of debt problem but is otherwise employed and earning enough to pay the rent.

Sea_Shell

I guess that whilst there's a supply of tenants that can get a guarantor, they'll keep asking. When that stream dries up, they'll have to rethink their terms.

henrik1971

Thanks all for your replies. I am amazed at the situation though. If landlords are in such a strong position that they can insist upon a level of security beyond that which a normal creditor would expect, then I understand they will take that comfort for as long as it is available.

I'm fairly financially stable, but if someone asked me to find a guarantor, it would be a dealbreaker. I might be able to get a family member to be one, but I would even be asking in the first place as it is such a big thing to expect another person to do for you.

Re: Student letting - my daughter went to university last year and a month before term started she signed up online for a room in private halls of residence. She then changed her mind about it 48 hours later. They would not let cancel and said she was now under contract for the academic year. When she'd signed up, on the forms she had proposed her mother as a potential guarantor, but this was never followed through. However, half way throught the first term, her landlord (who obviously going through his records) contacted my daughter to say if the guarantor didn't sign up within the next five days, they would terminate her agreement. I looked at my daughters tenancy agreement and could see no grounds for termination of her tenancy other than for non-payment, or if you essentially smash the place up / make a nuisance of yourself.
I challenged the letting company - they wouldn't reply to my calls or emails. My wife, scared to death our daughter would be turfed out on the street, signed up, much to my annoyance.

Chrysalis

GreenSnake wrote: »

I'd do the same, if I was a landlord.
There's no downside for them, if the tenants will actually provide guarantors.

Which they will do as its a landlords market due to the under supply.

The upside of my landlord is.

1 - No credit checks.
2 - No fees.

I expect these two things alone ensures a constant supply of tenants even with the guarantor requirement.

You dont consider it unreasonable tho to still be expecting a guarantor from reliable long term tenants?