What Is A Rent Guarantee And How Do I Get One?

Build to rent properties are new build development designed specifically for renting instead of purchase. The properties often come with a range of benefits including longer tenancies, dedicated on-site staff, and purpose-built communal areas. Build to rent properties are often designed to address several issues that renters face such as short-term leases and unscrupulous landlords, although the market is currently small, it is growing quickly.

According to research conducted by Home Owners Association, 40% of renters would appreciate renting directly from a responsible company or housing provider rather than a private landlord or lettings agent. Although this is all well and good, there are tenants that might perhaps struggle to secure a place with a build to rent property for several reasons.

The UK rental market is often a difficult place for prospective tenants. On occasion, tenants are pre-judged on their financial circumstances which can play a part in the decision-making process and can lead to repeated rejection. As a landlord, having a professional guarantor hugely reduces risk. Many personal guarantors are not made aware of or do not understand that if the tenant does not pay the rent, they are legally required to finance that loss.

There are a couple of instances where it might be necessary from a tenant’s perspective to have a rent guarantor. Whether a tenant is employed, a student (overseas or domestic), or in receipt of benefits having a rent guarantor could be the answer to them gaining access to a property. Traditionally, rent protection is designed to serve only the landlord and aid in evicting a tenant as soon as they fall into arrears. However, having a business rent guarantor will help to support tenants and give them the opportunity to catch up on any unpaid rent and stay in the property, or support them to seek alternative living arrangements, returning the property to the landlord.

There are many scenarios where tenants cannot access a guarantor within their family or friend circle, sometimes simply a lack of access to a UK-based guarantor is their concern. When a tenant cannot source their own guarantor, RentGuarantor will stand as the guarantor for a tenant regarding their rental payment responsibilities outlined in their tenancy agreement.

The mission is simple, create secure tenancies for tenants and landlords, without pre-judging the tenants’ circumstances. Every tenant deserves their dream rental home, and every landlord deserves to have their investments protected.

Richard Dawson (pictured), a rental sector expert at RentGuarantor answered a few frequently asked questions about the company’s services:

Meeting the criteria for consideration

During the tenant file review, we look at their credit file, photo ID, and proof of future income to ensure they can afford their rental payments. The criteria therefore include:

• The tenant to produce a Photo ID
• An acceptable credit file report (individually assessed)
• Documents to prove financial position i.e., payslips, Universal Credit letters, Student finance proof.

Application limitations

Although you would assume there are strict limitations on applying, RentGuarantor measures each individual application on its merits, so applicants shouldn’t worry when they apply.

What happens at the end of the first lease and the tenants wish to renew (regarding price increases)?

At the end of the lease, we invite the tenant to renew their product with us. The price for all product purchases depends on risk and rental amount, we will therefore complete a file review and price the product for the following year accordingly.

Moving and renewing

If an existing applicant wished to move or renew their lease at a high rate, they would be required to complete a new application and a new assessment of risk.

How the process changes from sector to sector

Regardless of whether the property you’re applying for is built to rent or privately owned, the process for buying the product as the tenant doesn’t change by sector. The affiliate agreements and how they work with partners to promote the products may have slightly different marketing to promote the product, but the actual purchase and fulfilment process remains unchanged.

We thank RentGuarantor for this information and guidance.