Retiree as guarantor for house rental

saver_ali

I wasn't sure whether to raise this in the retirement forum or the housing one, but the problem is unique to retirees, so here goes....

My adult son is moving out, into a rental property. They want a guarantor and I've been asked to complete an online form. I've been his guarantor before, but never been asked for this depth of information. The trouble is, DH and I are now both retirees, live comfortably, but without a regular income stream. We both have good credit ratings and own our home mortgage free. I don't see why they can't just do a credit rating check on me/us.

From googling, it seems that reference agencies want the guarantor's income to be at least 3x the annual rent, so that would be about £36k.

On paper our actual income doesn't look very good. I'm already taking a DB of £12k pa, but that's our only regular income. I get SP in 4 years, plus I have savings, small SIPP and a DC pot.

DH retired a couple of months ago, so doesn't actually have any income at the moment. We're living off his retirement bonus, and will start drawing on his large DC pot later this tax year. His DB and SP kick in in 4-5 years.

The reference agency seems to take account of savings, but you have to say how much you are taking as income per annum, and give statements. We're not taking any income because we'd don't need to!

I don't want to give my bank or savings account numbers to anyone, so assume it will be ok to redact them from any statements I submit. Even so, their data protection policy seems very broad, and they can share my data with whoever they think appropriate, except they won't sell it.

I'll call the reference agency when they open on Monday, but has anyone been in a similar position, and how did you handle it?

tacpot12

The best thing that can happen here is that you fail the referencing process and cannot become a guarantor. There are so many experiences related on this board and others where the guarantor has come onto the board for advice becuase their "trustworth" family member as failed to pay the rent, and they have lost their savings, their credit rating or their house because they have stood as guarantor.

Please don't do it. If you want to help your son, let him move in with you as your guest.

You haven't said why they want a guarantor. If you are prepared to share the reason, there might be some other options that would allow him to rent without exposing you to this horrendous risk.

OldBeanz

I am sure that as you are a mortgage free home owner they will be happy to have you act as guarantor.
As you say, redact your account numbers and explain on the form what you have written above. There is usually a free text field to explain your circumstances.

saver_ali

tacpot12 wrote: »

The best thing that can happen here is that you fail the referencing process and cannot become a guarantor. There are so many experiences related on this board and others where the guarantor has come onto the board for advice becuase their "trustworth" family member as failed to pay the rent, and they have lost their savings, their credit rating or their house because they have stood as guarantor.

Please don't do it. If you want to help your son, let him move in with you as your guest.

You haven't said why they want a guarantor. If you are prepared to share the reason, there might be some other options that would allow him to rent without exposing you to this horrendous risk.

Thanks for the warning. He has been living with us for a year since he finished uni, and wants to get away from us now!

I didn't know why they want a guarantor, so wasn't withholding that information. Neither of us questionned it, as I've done it before when he was at uni. It was just never this involved. Renting in London is new to us!

I've now spoken to my son again, and the only reason he can think of is that his salary might be just under their threshold. He has a good job as a trainee account and is due a pay rise shortly. Maybe he can get a letter from his employer saying that.

He'll give the letting agent a call on Monday.

Thanks again for the reply.

chiefie

Even for my student son we had to go through a ridiculous reference check to act as guarantor. Owning our home made no difference neither did the fact that income was being earned abroad. In the end I had to pay a years rent up front. It’s ridiculous - these are student digs !!

squirrelpie

He has a good job as a trainee account and is due a pay rise shortly. Maybe he can get a letter from his employer saying that.

Or just wait until he's got the rise and doesn't need a guarantor?

saver_ali

squirrelpie wrote: »

Or just wait until he's got the rise and doesn't need a guarantor?

It would have made sense to wait but one of his friends/new flatmates needed a place in a hurry. They're supposed to be moving in later this week. The guarantor reference application only came through this morning.

Sorry to hear about your experience chiefie. I guess we were lucky to avoid it with uni houses.

bluenose1

I have gone guarantor on my son's part of the rent in private accommodation a couple of times whilst he has been at University and also whilst doing an intern in London.
I just give them the information requested. They have to follow the data regulation policy so cannot do anything with it.

MarkCarnage

I've been asked twice, for daughter and son.

Both times after I'd given up FTE as an employee. First time was three or four years ago, when I had just started running my own ltd co for consultancy work part time. Didn't have the tick box three year record. Ended up speaking to a director of the letting agents and they were happy that I sent them a copy of my company and personal bank statements proving significant solvency. All made more challenging as we were in Mallorca on holiday it all needed done in about a week or so....

More recently, I got asked to do same for my son as a student going into a flat with a friend. Just before I started drawing down my DB pension, and as consultancy work was being run down, there wasn't much happening in the ltd co. The letting agency in this case outsourced the credit checking of guarantors, and they were being pretty inflexible. Told them a significant pension income was about to start, offered doc evidence of it, also of significant SIPP and other portfolio but no, they had to see evidence of current income....went back to letting agency and told them to stuff it.

Ended up that they were content with my son's friend's father (we are also good friends of them) being sole guarantor as the bureaucracy became too much.....the letting agency would have budged eventually I think, but the crowd they outsourced too were useless...computer says no type of approach.

coyrls

MarkCarnage wrote: »

I've been asked twice, for daughter and son.

Both times after I'd given up FTE as an employee. First time was three or four years ago, when I had just started running my own ltd co for consultancy work part time. Didn't have the tick box three year record. Ended up speaking to a director of the letting agents and they were happy that I sent them a copy of my company and personal bank statements proving significant solvency. All made more challenging as we were in Mallorca on holiday it all needed done in about a week or so....

More recently, I got asked to do same for my son as a student going into a flat with a friend. Just before I started drawing down my DB pension, and as consultancy work was being run down, there wasn't much happening in the ltd co. The letting agency in this case outsourced the credit checking of guarantors, and they were being pretty inflexible. Told them a significant pension income was about to start, offered doc evidence of it, also of significant SIPP and other portfolio but no, they had to see evidence of current income....went back to letting agency and told them to stuff it.

Ended up that they were content with my son's friend's father (we are also good friends of them) being sole guarantor as the bureaucracy became too much.....the letting agency would have budged eventually I think, but the crowd they outsourced too were useless...computer says no type of approach.

I had the same experience with being a guarantor for my son's student rental after I had retired. I had no traditional regular income (no DB pension or annuity). After supplying 12 months' bank statements I was still rejected until I pointed out the transfers in that could be counted as income. No common sense at all, they just needed something to allow them to tick a box.

saver_ali

MarkCarnage wrote: »

I've been asked twice, for daughter and son.

Both times after I'd given up FTE as an employee. First time was three or four years ago, when I had just started running my own ltd co for consultancy work part time. Didn't have the tick box three year record. Ended up speaking to a director of the letting agents and they were happy that I sent them a copy of my company and personal bank statements proving significant solvency. All made more challenging as we were in Mallorca on holiday it all needed done in about a week or so....

More recently, I got asked to do same for my son as a student going into a flat with a friend. Just before I started drawing down my DB pension, and as consultancy work was being run down, there wasn't much happening in the ltd co. The letting agency in this case outsourced the credit checking of guarantors, and they were being pretty inflexible. Told them a significant pension income was about to start, offered doc evidence of it, also of significant SIPP and other portfolio but no, they had to see evidence of current income....went back to letting agency and told them to stuff it.

Ended up that they were content with my son's friend's father (we are also good friends of them) being sole guarantor as the bureaucracy became too much.....the letting agency would have budged eventually I think, but the crowd they outsourced too were useless...computer says no type of approach.

That's useful. Thanks. My son's has been outsourced to a reference agency too. Sounds like its best to see if we can get somewhere with the letting agent. Two of the four of them haven't been asked for a guarantor. One hasn't even started his job yet, but his starting salary is £500 more pa than my son's. That £500 seems to make all the difference.