The first three months of the Renters Rights Act has led to a 50% rise in rent guarantor applications to one supplier.
As most landlords can no longer request or take more than one month’s rent upfront, so they’re asking renters to provide guarantors instead.
Landlords are also relying on rent guarantor firms to manage their more unusual Know Your Customer obligations, covering sanctions and Politically Exposed Persons, as well as income checks.
Graham Hayward – managing director of one guarantor firm, Housing Hand – says: “The growth in rent guarantor applications we have received in the last 100 days has been phenomenal, as the market manages its changed risks in the new Renters Rights Act landscape.”
But he says that while his company has seen a surge in demand, it hasn’t seen a huge increase in claims for missed rent.
The business has settled around £7m in payouts to accommodation providers in the past five years, running at an average of some 1.5m per year.
So far that average is unchanged, despite the Act now being in force since May.
Hayward adds: “The overall volume of payouts remains pretty static … Landlords who have worked proactively with guarantor services have largely taken the changes in their stride.”
