30th
Jul 2017
Since the announcement of Brexit there have been growing fears amongst landlords and letting agents that relying on tenants' relatives to act as guarantors may not be such a safe option, as it once was.
In the majority of cases young renters, whether students or having just 'flown the nest', are reliant on family members to act as guarantors and is welcomed by landlords and letting agents, for the obvious reason.
The unstable political situation coupled with Brexit is being blamed upon an explosion of household debt and an insured guarantor service states that homeowners may not, because of intended interest rate hikes, be such a reliable guarantor source nowadays due to their level of debt and repayment charges.
Acting head of corporate services of a London chain of agents Sherard James, said: "We have many international students and overseas professionals applying for our properties. However, a large proportion of these applicants are unable to supply a UK rent guarantor. Usually, if a student is unable to provide a UK guarantor, an advance of an additional six months’ rent is usually required to secure the property. This can be problematic, as many tenants cannot afford such a large upfront sum."
Any difficulty in finding a reliable guarantor will of course reduce the chances of a prospective tenant finding a place to live and at the very least slow down the process. The agents have now formed a partnership with a rent guarantor service that will guarantee the rent if a tenant fails to pay.
He continued: "Our landlords are happy, as we now have a larger selection of tenants to offer them and the tenants are happy as they can afford to rent. It costs the tenants a minimal fee and landlords benefit from guaranteed monthly rent, for the duration of the tenancy."
Although this is a somewhat unconventional method of securing tenancy agreements it does mean that landlords will be protected against defaulting on rent, and the arrangement is relatively stress free for prospective tenants as it allows them to move in quickly.
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