A group of housing industry charities, including Shelter and Generation Rent, has called on the government to limit landlords’ use of rental guarantors.
While they haven’t asked for a full ban, the group wants to prevent landlords from requiring a guarantor:
- When the tenant has sufficient income to cover the rent, or;
- When the landlord has insurance in place to cover non-payment.
They also call upon the government to limit guarantors’ liability to six months’ rent.
According to Generation Rent’s Dan Wilson Craw, landlords use strict guarantor requirements to discriminate against people who are self-employed or who receive benefits.
However, removing one of the remaining protections for landlords against non-payment of rent would make them even less likely to accept tenants on low or inconsistent incomes.
When the ban on taking more than one month’s rent upfront was first floated, sector experts warned that more landlords would require guarantors – and that tenants who couldn’t access a suitable UK-based guarantor could be prevented from renting. Taking away guarantors too will make it even more difficult for tenants without long-term proof of income and a long UK rental history to find homes to rent.
How likely are more guarantor restrictions?
The Renters’ Rights Bill proposes that guarantors who are related to the tenant will not be held liable for outstanding rent if the tenant dies. Are more such restrictions likely?
Currently, it would seem not. The government has already rejected an amendment to the bill that would have imposed tougher rules. At the House of Commons committee stage, Alex Sobel MP proposed an amendment that would have met the standards the activists are calling for, as well as stopping landlords from requiring a guarantor if they had also taken a tenancy deposit.
At the time, the amendment was not put forward for MPs to vote on. Explaining the government’s position, housing minister Matthew Pennycook acknowledged that landlords may need the assurance of guarantors and added that “limiting guarantors could inadvertently make life more difficult for certain types of renter”.
There is still time for a government U-turn. While the Renters’ Rights Bill is in its committee stage in the House of Lords, peers could still vote for an amendment that would further restrict guarantors. For now, though, it looks as though landlords will still be able to ask for guarantors after the bill passes.
