Landlords and letting agent are being urged to be cautious about using family members to guarantee rent payments for tenants, following the UK’s decision to leave the EU.
The purpose of a tenant guarantor is to ensure that the rent payments are paid in the event of the tenant defaulting on the rent.
However, with the latest figures showing that the economy is stalling and household debt is soaring, Housing Hand, an insured guarantor service in the UK for students and working professionals, is concerned that people with a high level of debts, including homeowners, may not be a reliable guarantor.
Sherard James, acting head of corporate services at Kinleigh Folkard & Hayward (KFH), shares Housing Hand’s view.
He commented: “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.”
To help resolve the problem KFH occasionally encounter with some tenants, the company has started working with Housing Hand, which stands as a guarantor for tenants.
James added: ““Thanks to our partnership with Housing Hand, we have been able to offer a solution with Housing Hand acting as their UK rent guarantor.
“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. It’s a win-win.”
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