Guarantor gap narrows rental options for tenants without family support

Asked what they would do if they needed a guarantor but did not have a family member or friend who could help, 51% of tenants said they would look for a cheaper property and 16% said they would stop their property search altogether. Only 18% said they would use a professional guarantor service, while 15% selected another option.

The findings suggest some tenants may be ruling themselves out of suitable homes, or leaving the market altogether, because they do not know that alternatives to a family guarantor are available. Awareness of those alternatives remains strikingly low. Nearly three quarters of tenants, 74%, said they had never heard of professional guarantor services. A further 12% had heard of them but did not know the detail, while another 12% were aware of the services but had never used one. Just 2% said they had used a professional guarantor.

For renters who do not have family or friends in a position to guarantee their tenancy, that lack of awareness can make the difference between continuing their search and walking away. Among the 37% of tenants who said they had needed a guarantor at some stage, 7% were unable to find one.

The findings reflect wider evidence that many renters encounter guarantor requirements without understanding the options available. Research highlighted by Housing Hand found that 34% of renters did not know what a guarantor was when they were first asked to provide one.

The issue has become more relevant following changes introduced under the Renters’ Rights Act, which prevent landlords from requesting more than one month’s rent in advance. With advance rent no longer available as an additional safeguard, landlords are looking more closely at referencing, affordability and the other forms of reassurance available when considering an application.

More than half of landlords, 54%, said they were now more likely to request a guarantor from applicants who did not comfortably meet standard affordability checks. A further 28% said their approach had not changed, while 13% had always required a guarantor in those circumstances. Only 5% said they were less likely to request one because they used other options, such as rent guarantee insurance, instead.

The English Housing Survey 2024-25 found that one in five private renters was already being asked to provide a guarantor before moving into a property. LRG’s findings suggest that clear guidance about guarantors and the alternatives available will become increasingly important for both landlords and tenants.

Rent guarantee insurance is also playing a growing role. Nearly 37% of landlords said they already had a policy in place, while a further 19% were actively considering it. However, 17% said they were not aware that this type of protection existed, highlighting an opportunity for lettings professionals to explain the options available to both sides.

Allison Thompson, Chief Lettings Officer at Leaders, part of LRG, commented “Landlords need confidence that a tenancy is affordable and sustainable, particularly now that rent in advance is no longer available as an additional safeguard. At the same time, tenants who do not have family or friends able to act as a guarantor should not assume they have run out of options. Our research shows there is a real opportunity to make people more aware of professional guarantor services and rent guarantee insurance. By explaining those choices early, we can help landlords make informed decisions while giving more tenants a fair opportunity to find the right home.” 

You can download the full report here.