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

Chrysalis

henrik1971 wrote: »

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.

Not only that, but a landlord isnt even a creditor.

Rent is paid in advance not arrears.

I can get 10s of thousands of credit without even needing to provide proof of employment or income, all approved instantly.

But as you said landlords are in a position to make very high demands due to the state of the market. This is combined with rents rising out of control well above inflation rates.

I think there is room for legislation where a landlord cannot provide a tenancy on secured loan terms, in other words it would be considered unlawful to ask for a guarantor unless the person had a CCJ or previously evicted for non payment of rent, I doubnt we would ever see such a law tho, the only thing to fix this in reality is a change in the balance of housing supply which seems very unlikely in the forseeable future. Remember we did see a law change where it was considered landlords were abusing security deposits, and now they get centrally managed.

saajan_12

Chrysalis wrote: »

Not only that, but a landlord isnt even a creditor.

Rent is paid in advance not arrears.

A landlord doesn't lend money, but they do lend an asset which has value. Yes, rent is paid in advance of the month (or tenancy period) for which it applies, but not in advance of the potential time the tenant could retain possession of the asset (property). e.g. a tenant pays rent on 1st Jan for the period 1st-31st Jan, but if they then stop, they still have possession of the property for another ~40weeks that it will take the LL to evict. So the fact that rent is in advance of the month is irrelevant.

Chrysalis wrote: »

I think there is room for legislation where a landlord cannot provide a tenancy on secured loan terms, in other words it would be considered unlawful to ask for a guarantor unless the person had a CCJ or previously evicted for non payment of rent, .

Lets not get silly, every heard of a free market?
-> A LL could simply choose not to let to someone who would otherwise not have sufficient income/references to demonstrate affordability. Where are all those people supposed to rent then?
-> The 'evicted for non payment of rent' criteria would be pointless anyway, as often non paying tenants are evicted by Section 21 or agree to leave, where no reason is given.
-> The LL could ask for someone with better credit to be added as a co tenant instead of a guarantor.

Chrysalis

I know what a free market is, but there is also such a thing as a regulated market, regulated markets happen when its considered a free market fails or is not fit for purpose. The question is will we ever reac a point where that decision is made.

If you a landlord/lady its easy to think everything is hunky dry, thinking there is nothing wrong with asking for a guarantor when you not even a creditor and the position it puts people in when making such a request, all at the same time as providing almost no security, rent increases that bust inflation and expecting the tenant to cover fee's.

The private letting market in the direction its going is heading for trouble, it could be several years away but its heading there.

A LL could simply choose not to let to someone who would otherwise not have sufficient income/references to demonstrate affordability. Where are all those people supposed to rent then?

They could, but if enough LL's did this they could also run out of tenants to let to.
If it created homeless people in the short term we would likely see them taken in by friends/family, in the long term we may possibly would see a shift to social housing to house them (a good thing). In my opinion social housing is where people at the bottom end of the letting market should be living anyway, the private letting market is unfit for purpose, its requirements for a profit conflict.

The 'evicted for non payment of rent' criteria would be pointless anyway, as often non paying tenants are evicted by Section 21 or agree to leave, where no reason is given.

A section 21 is basically just a notice to leave, it can be for any reason as you stated so would not count for this purpose. It would have to be a section 8 not section 21, and the section 8 reason would need to be non payment of rent.

The LL could ask for someone with better credit to be added as a co tenant instead of a guarantor.

This is no better, it offers excessively high security for the LL (wanting 2 people responsible for rent), and the co tenant would be taking on even more responsibility as they would probably be liable for everything in the tenancy agreement not just the rent (e.g. damage to property). Also I dont think credit history has any bearing on these decisions, e.g. my LL doesnt even do a credit check. Many LA's will charge for a credit check and not even carry one out.