Tenancy guarantor - insurance

CAG8

We find ourselves in a position where we have no choice but to act as guarantor for all the tenants living in the house our daughter is renting a house with (post uni so not students). Until she reaches a salary of £33k we have to do this otherwise she won't be able to earn anything at all.

We don't know the other tenants, but we don't seem to be able to find insurance to mitigate the risk we are blackmailed into exposing ourselves to.

Does such insurance not exist - bearing in mind there must be many hundreds of thousands of people in our position now - and numbers increasing?

What if young people aren't as lucky as our daughter and don't have anyone to guarantee for them? How do they move on/find work? They aren't allowed a mortgage and now they aren't allowed to rent either - what do they do?

subjecttocontract

Presumably they either live with parents, rent a single room in an HMO, or rent a room with a live in landlord. There are surely other options than a house share where you are required to be guarantor for everyone. I've never heard of it before and certainly wouldn't even consider doing it.

flaneurs_lobster

Not perhaps seen as the norm in modern Britain, but in my youth the children remained domiciled at the family/parents' home until such time as they could afford to pay for their own accommodation (and wished to move out).

Maybe just another victim of us Boomers having robbed the Zoomers of their opportunities to take on as much debt as we were able to in our early 20's.

EDIT - Thread from a couple of years ago

https://forums.moneysavingexpert.com/discussion/6538467/rent-insurance-for-tenancy-guarantors-or-tenants

MattMattMattUK

This has got to be the biggest car crash waiting to happen I have seen on here in a long time, do not do it.

No, this kind of insurance does not exist as a standard product, I am sure you could get it specially underwritten for a few tens of thousands a year with a similarly huge excess and claim limits. Because a guarantor cannot expire it would effectively be open ended liability so no insurer is ever going to want to offer it.

Your daughter needs to rent somewhere cheaper, even if they means commuting, or lodge rather than rent.

Jemma01

"We find ourselves in a position where we have no choice but to act as guarantor for all the tenants living in the house our daughter is renting a house with (post uni so not students). Until she reaches a salary of £33k we have to do this otherwise she won't be able to earn anything at all."

I feel like you're being manipulated into this. This is not the only way your daughter can get a job. I lived as a lodger for a while when I couldn't afford it. Paying for ppl you don't know is crazy, esp when these things go wrong more often than not. I couldn't ever put my parents in that position. Is she moving with her friends? Why are you the only one willing to be a guarantor? Where are the other parents?

user1977

The options for those without guarantors include insurance products which landlords can take out (at the expense of the tenant), but I'm not aware of anything specifically protecting guarantors. You can of course take out more general insurance against circumstances which might affect your ability to pay such as redundancy, ill-health, etc.

caprikid1

As has been stated , it feels like you are being manipulated, there are 5 people in this house surely with 5 parents, don't be the sucker.

Your daughter needs to find another option, you will not get this insured for a reasonable amount of money. Not sure where this is but you would be better of putting a deposit on a flat.

soolin

sorry but I’m with the above comments, don’t do it. We have 3 sons all went through uni, 4 degrees between them. All 3 lived away, 1 after he completed his Masters, we guaranteed the rent for just our sons alone.

During the time they lived in various HMOs there were several other lodgers who defaulted. We had the students deciding to give up their studies and go home without paying their rent, a supposedly wealthy ex pat who was studying as well as working and who went home for a holiday and never came back, a couple of younger girls who were working, not studying and just did a moonlight flit. In all cases it was an issue for the landlord to sort thank goodness as rents were very high in the South east even in an HMO.

CAG8

Re Flaneurs_lobster - she is a teacher and has to live near the school she is working at (a long way from us) so she can't live at home until she can afford to move out unfortunately. I would agree with you otherwise - I lived at home until I was 30

Also - she can afford it, but the landlord won't let her rent without a guarantor regardless of that fact.

Thanks for the link - I had found it before posting but it was a couple of years old so wondered if anyone had any more recent experiences

CAG8

Re Jemma01 - we are not the only guarantors, but the guarantors are jointly and severally responsible for the tenants, not just the one they are connected to. Landlord says this is 'normal'!!!

Catonthemoon

I wouldn’t touch this with a barge pole! Why does she have to live in that HMO? Is it not possible for her to rent a 1 bed or studio flat by herself & if required, you could act as a guarantor for that?
You would constantly be worrying about if any of the other 3/4 people stop paying, and in the current climate, that is a very real possibility.