New research from RentTech company Goodlord has revealed that the number of landlords asking prospective tenants to provide guarantors ahead of renting a property in the UK has risen by 3% since this time last year.
The data, sourced from Goodlord’s database of over 1,000 letting agencies, revealed that the recent hike to 15% marks the highest rate recorded — a staggering 50% increase in requests for guarantors since Goodlord’s tracking began in 2018.
The recent rise is arguably reflective of the current cost-of-living crisis and higher inflation rates in the UK. As rents continue to rise out of line with wages, more landlords are demanding the added security of a guarantor to ensure they still receive rent in the event that the tenant can’t pay.
The increase was felt differently across the various regions of the UK. The South West was most affected with requests for guarantors rising from 15% to 28% in 2022. The average rent for the region has also risen by 10% (£101 per calendar month) when compared to this time last year.
In comparison, requests for guarantors in Greater London has gone down from 9% to 8%, despite rents in the city rising by 13% (£218 per calendar month) when compared to the same time last year.
Commenting on the data, Blake Richmond, Managing Director of Referencing at Goodlord, said: “The cost-of-living crisis, coupled with steep rising rental prices, has exacerbated an already uncertain lettings market, leading to an increase in the number of landlords requesting tenants to name a guarantor.
“As rents continue to rise out of line with wages, more tenants are having to spend a larger portion of their salaries on rent. When you add to this the increasing lack of rental properties available at the moment, tenants are needing to stretch their budget further to secure properties, again causing landlords to seek out the extra level of security, provided by guarantors.
“While the number of tenants being asked to provide a guarantor has risen in most regions across the UK, notably in the South West, Greater London however has seen a decrease. This could be reflective of how the London property market is becoming more expensive and competitive. Often tenants in London are offering to pay more up front as a means of securing a property, giving landlords another sense of security to their means outside of guarantors.
“Naming a guarantor can be a positive thing to enable a greater spectrum of tenants to access housing, but it can add complications to the rental process and is something that should only be requested when genuinely needed, lest we create unnecessary barriers to entry in an already competitive rental market.”
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