Housing Hand, a leading provider of rental guarantor services, has recently reported a significant surge in rental guarantor applications over the past six months. With a staggering 50% increase in demand, the company highlights the growing need for rental guarantors in today's housing landscape.
The challenging economic climate and rising rents have contributed to this trend, as more people seek the assistance of guarantor services to secure the accommodation they desire.
The need for rental guarantors is no longer limited to students with limited credit history.
Working professionals are increasingly required to provide a guarantor to secure tenancies, leading to a rapid rise in applications for guarantors.
Recognizing the need for solutions in the rental sector, Housing Hand has been collaborating with an expanding network of accommodation partners to meet the growing demand. The company has enhanced its technological infrastructure to ensure a swift and efficient service, capable of scaling with the increasing application numbers.
Amidst this surge in demand, Housing Hand has found that a concerning number of individuals are failing the checks required to serve as a guarantor.
The rate of those passing the relevant checks has dropped to approximately 25%, leading to an increased reliance on referencing firms for additional assurance. This, in turn, has created even higher demand for rental guarantor services, as landlords and letting agents seek additional security measures to safeguard their rental income.
The UK rental market has experienced various challenges, including interest rate increases and a decrease in landlords from the private rented sector. As a result, rents have risen significantly, putting additional strain on tenants. Home reports an 11.4% increase in rents
across the UK in the past year, while Foxtons notes a 13% rise year-on-year in London, particularly in East London, which has seen an 18% increase in rents since May 2022.
Zoopla's data further reveals the impact on the rental market, with 11% of homes for sale on its site being former rental properties. This mass exit from the private rented sector has resulted in a substantial decrease in the number of available rental homes. In the majority of regions, Zoopla's data shows that the supply of rental properties remains between 20% and 40% below pre-pandemic levels.
Last year, Housing Hand identified the challenges faced by students in finding suitable accommodation due to the supply and demand imbalance within the rental market.
Today, the issue has expanded to include working professionals and a broader range of tenants seeking housing solutions. To address these challenges, Housing Hand has been working closely with purpose-built student accommodation providers and Build to Rent partners, whose co-living models offer attractive options for renters.
By using a guarantor company, these businesses can streamline the tenant onboarding process, reduce costs, mitigate the risk of tenant defaults, and alleviate the administrative burden associated with recovering unpaid rent.
The rise in rental guarantor applications and the increasing number of individuals failing the necessary checks highlight the urgent need for solutions in the rental market.
Housing Hand, along with its partners and accommodation providers, aims to address these challenges by offering reliable rental guarantor services and collaborating to create innovative housing models that meet the demands of tenants and provide peace of mind to landlords. As the rental market continues to evolve, the importance of rental guarantors as a safeguarding mechanism for both tenants and property owners cannot be overstated.
If you are interested in promoting your properties to students, www.accommodationforstudents.com is the UK’s leading student accommodation website.
