Landlords request Guarantors

There has been a huge rise in the number of landlords asking high-earning tenants - that is those earning between £50,000 and £74,999 - for a rent guarantor.
The findings from Goodlord, highlight that the number has rocketed by 92% since 2020.
And for tenants earning between £25,000-£50,000, the number being asked for a guarantor has gone up by 58%.
The findings highlight that as BTL mortgage rates go up and the supply of rented homes drop, landlords are opting for the security of guarantors.
‘Market is facing a series of overlapping challenges’
Goodlord's director of insurance, Oli Sherlock, said: "The rental market is facing a series of overlapping challenges.
"We've spent years not building enough homes, meaning the supply of rental stock is low.
"This is being compounded by landlords - who are facing rising costs and ever more complex regulation - selling up and leaving the market."
He added: "This supply and demand problem means rents are rising at a time when tenants have less disposable income thanks to the cost-of-living crisis.
"This means more tenants are being asked to show they have the support in place to meet their rental obligations, should they need it."
Steady rise in requests for tenants to have a guarantor
RentTech experts Goodlord analysed 220,000 tenancies that were taken out between January 2020 and June this year and found there was a steady rise in requests for tenants who earn more than £25,000 to have a guarantor.
Official data reveals that full-time employees in Britain earned an average salary of £33,000 last year. It was £31,461 in 2020.
However, just 3.7% of renters earning between £25,000 and £49,999 in 2020 were asked to provide a guarantor by a landlord or letting agent.
But this year, that figure has risen to 5.84% of tenants - that's up by 58%.
Goodlord highlights that the guarantor requests are now higher than at the peak of the pandemic.
‘It's a far from ideal situation’
Mr Sherlock said: "It's a far from ideal situation for either tenants or landlords.
"The Government should see this as an additional sign that more support for the rental market is urgently needed."
Simon Thompson, the managing director of Accommodation for Students, agrees with that sentiment, and he said: "Asking a high-earning tenant for a guarantor shouldn't be a surprise.
"It's always better to be safe than sorry - and with a drop in supply, landlords are cautious about taking on tenants.
"Along with landlord insurance, asking for a rent guarantor is something that all landlords should consider - whether the tenant has a well-paid job or not."
Landlords are facing increasing pressure
While landlords are facing increasing pressure in the private rented sector, including higher mortgage costs because of increasing interest rates, a guarantor offers security.
But the figure for tenants earning more than £50,000 has come as a surprise - despite their salaries being much higher than the national average.
The data shows that just 1.35% of earners in this pay bracket in 2020 needed a guarantor to secure a tenancy - that increased to 1.92% last year.
But so far this year, the proportion of high earners needing a guarantor has gone up to 2.59% - nearly doubling since 2020.
Goodlord says that guarantor requests will continue rising this year and rent prices will peak in the summer.