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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to think its stupid that a guarantor *needs* to be a UK homeowner??

71 replies

PeachyParisian · 17/07/2014 01:16

Hopefully DH and I will be moving to the UK this autumn and we are trying to organise rented accommodation in advance.

I will be studying and DH will be unemployed initially which means our options are really very limited. I have found a landlord that is happy with student tenants but requires a guarantor to be a UK homeowner.

My DM, who is the only person I can ask to be our guarantor, does not own her own home. She us definitely in a financial position to be able to cover our rent, if we could not, which is the usual criteria. DHs parents do own their own home, but not in the UK and they are not in a position to cover our rent if we defaulted anyway.
We fully intend to pay our own rent, and can definitely afford to but this is slightly trickier to prove!

I understand a landlord needs to be sure they will get the rent, but I think the homeowner thing is absolute bollocks! especially considering fewer and fewer people can afford to own their homes/choose not to.

What can I do? I have asked if they have an alternative financial/minimum income requirement the guarantor can meet and I would pay for a landlords insurance policy if necessary. I desperately do not want to move back to England without anywhere to live and this house seems so perfect for us Sad We had hoped that landlord direct would be easier as estate agents in North Yorkshire don't seem to want to touch students with a barge pole, regardless of the fact that I am a 'mature' student!

OP posts:
Shahsham · 17/07/2014 05:45

In France banks can be the guarantor (for a price obviously!). Is this possible?

DoctorGilbertson · 17/07/2014 05:46

We rented for 11 months after moving back from overseas.

Before we moved back we paid 1.5 months deposit, agent fees and some kind of insurance (can't remember what) PLUS 6 months rent up front. After 4 months in the house we paid another 2 months rent up front (i.e. 2 months rent up front, 2 months in advance of when it would be due) and after 3 months another 3 months up front (i.e. the final 3 months were paid 2 months before due).

And I had a job ...

Teadrinkerandatinker · 17/07/2014 05:46

Chances are she won't even get past the border even if she is British i have seen loads of stories in the news the past year or so British expats coming back because their broke or something went wrong abroad and being denied access from what she said in her post she is basically going to come here and be homeless because she has no where to live here so mature of her Hmm

Southpaws · 17/07/2014 05:49

Totally agree with andrewofgg and don't see why you are focussing on it being 'fair' op. It's a business deal in which a LL is reducing their risk of being left with a mortgage to pay, no rental income and no means of redress.

If a non home owner was a guarantor, the landlord would not be able to secure the debt to anything tangible. You can't get a charging order over a bank account but you can secure a debt against property, hence them wanting a home owner as guarantor. They are not concerned with whether a home owner can afford to pay rent, they are concerned with having an asset that can be used to recover debt.

ConstableOdo · 17/07/2014 05:58

Lot of "tough shit!" free marketeers on here tonight, aren't there? I'm kidding: you're probably just logical people saying logical things.

Yes, a house is tangible collateral, and I suppose the original post was "AIBU to think it's stupid", not "AIBU to think it's unfair". It certainly isn't stupid to insist on a UK homeowner as a guarantor. But it certainly isn't untrue to say that the UK housing market isn't fair and hasn't been for a long time.

Shonajay · 17/07/2014 06:07

No I don't- unless you pay a lot up front and have an airtight contract. A lot of landlords or sellers will just not want the extra hassle.

Maursh · 17/07/2014 06:23

I have to disagree with you, Andrewofgg and agree with the OP. insisting a guarantor be a "home owner" is plain dumb. I presume that the landlord is asking for this directly, because it makes no sense commercially so I would not believe that a letting agency would do this.

A guarantee cannot be secured against the property since it is not a debt. Furthermore, debt is tiered so any mortgage with a bank would take priority over any other debts secured against the property. For instance if you loaned a friend money for the down payment and wished for it to be secured against the property, this would be subordinate to the bank loan - if it is not then the bank won't lend.

In short - stating that you want a home owner to act as guarantor is assuming that there is equity in the home and there may well not be. Furthermore, this equity is very difficult to retrieve (property is slow to transact as opposed to, say an equity portfolio or cash). A cash flow should be a higher priority for ensuring the rent is paid each month.

Either this is a really dumb request or I would be very suspicious about what they are hoping to gain from the guarantee.

OP - I would recommend you ask the landlord what they are hoping to achieve from the guarantee and work from there - point out that "home ownership" is not evidence of equity in the home and surely what they are really after is some confidence that rent payment will be made in the event that you renege.

Andrewofgg · 17/07/2014 06:45

Maursh If the tenant reneges the LL can sue the guarantor and judgment will follow. And then the LL can get a charging order over the guarantor's home, to rank of course behind any mortgage there may be.

But generally: a homeowner especially of a few years' standing is more likely to be good for the money than a renter, and LLs will not want to investigate the financial standing of guarantors in great depth.

Agree with others that cash up front is best. Money talks.

Bardette · 17/07/2014 06:47

Try somewhere else OP. We just rented a house with my MIL acting as guarantor. She does not own her home but has substantial savings which we provided proof of with a bank statement.

Bardette · 17/07/2014 06:51

Chances are she won't even get past the border even if she is British i have seen loads of stories in the news the past year or so British expats coming back because their broke or something went wrong abroad and being denied access from what she said in her post she is basically going to come here and be homeless because she has no where to live here so mature of her
What a ridiculous statement. British citizens cannot be denied entry to Britain - where would they send them too instead?

AuntieStella · 17/07/2014 06:55

I note they are not insisting on bein a homeowner, but on being a UK homeowner.

As yo ave been lying broad, you will have no UK credit rating nor any demonstrable links to UK. They are seeking a guarantor who has assets that are fixed in UK.

Once you have been resident here for a whole, and have an acceptable UK credit rating, the requirements will change. So when/if you move you may well not encounter this again.

Moreisnnogedag · 17/07/2014 07:01

I get the irritation. My mom is a very high earner but isn't a home owner so when DH and I were students PIL acted as guarantors.

Loads of stories about uk citizens denied entry to the uk?!! Yeah right. I'll eat my hat if you show me one.

AuntieStella · 17/07/2014 07:11

"lying broad" Blush

I am so sorry that's an awful autocorrect. I was meant to say "as you have been living abroad"

SanityClause · 17/07/2014 07:14

I was interested in that statement as well, More.

It seems a British citizen has a right to reside here, but may may not automatically have a right to claim housing or benefits, if they cannot show they are "habitually resident".

Perhaps that's the kind of situation Teadrinker is thinking of?

I can't say it's anything I've ever heard of, but you can imagine the "news stories" about IMMIGRANTS being allowed to live here but BRITISH PEOPLE being turned away, in certain areas of the press. Hmm

AnitaManeater · 17/07/2014 07:21

If they have been out of the UK for more than 52 weeks then there will be a 3 month wait before any UK benefit can be paid, even if they are UK citizens

Bardette · 17/07/2014 07:42

A three month wait for benefits is a bit different from being denied entry!

MaryWestmacott · 17/07/2014 08:03

Op, can your DH line up a job before you move? DH moved back to the uk from overseas and he just had to prove his income.

Look at it from the landlords point of view, you aren't working, he's not working and you've not lived in the uk for a while - you might know that you are a safe bet for the rent but it doesn't look like it from the outside.

LIZS · 17/07/2014 08:22

Isn't it so they can put a charge on the property should you get into arrears ?

JassyRadlett · 17/07/2014 08:30

Teadrinker, you're talking utter bollocks - your agenda is demonstrated by the hateful 'this country is full' bullshit.

CouldntGiveAMonkeysToss · 17/07/2014 08:35

OP you say your mum would be able to pay your rent if you couldn't. Could you perhaps loan the firsy six months rent from her and then pay her back monthly? Some landlords will accept rent upfront instead of a guarantor.

whois · 17/07/2014 08:36

Couple of 'easy' fixes.

  1. Pay 6 months upfront.
  2. Offer to pay for insurance for rent default - could be quite a bit extra each month.
  3. Find a nice big double room which someone is renting out in their house, will often be under a lodger agreement or something rather than a proper AST and hence won't require the same level of checks.
  4. Try and find temporary accommodation until DP is working when you should find it much easier.
  5. Speak to your uni and see if they have any recommended landlords - must be loads of students who have this problem.
Iquitelikeapples · 17/07/2014 08:43

You've said your going to be a student - have you spoken to the accommodation office at your uni? They should be able to help you.

Original poster
PeachyParisian · 17/07/2014 10:06

Teadrinkerandatinker. stay in your own country this one is full I'm British born and bred and lived here until I was 18 before moving abroad- so this is "my own country".

Thanks for everyone suggesting paying up front. We might be able to pay for 3 months in advance and I have also offered to pay the landlords insurance. I don't want to out myself as I suspect my DM is a MNer but she can very comfortably afford to cover my rent but i'm confident it will never come to that, and asking for a loan to pay rent in advance isn't really an option though.

I think the LL usually only lets to PG or Mature students and has asked me for proof of study as part of the application, but if we were to look elsewhere DH having work would help massively. Due to his visa restrictions it's not too easy for him to pop over and look in advance though, yes teadrinker he isn't English Grin !

We had a similar problem last year when we moved to France, we needed a guarantor in France, but not necessarily a homeowner because our salary was not 3x extortionate rent in Paris. In the end my employer offered to be my guarantor but we found an Agent who was happy to rent to us and charge us an obscene amount of rent.

This LL was on a list of approved landlords in the city I will be studying in that was given to me by the uni after they informed me I wasn't eligible for any student accomm. Bottom of the list as I'm a returning home student.

OP posts:
BigChocFrenzy · 17/07/2014 10:09

As an LL, I employ letting agents and a very important part of their work is finding reliable tenants, who have financial resources to pay the rent.
Agents run standard credit checks, similar to what a bank would do before lending money.
To have a good credit rating requires a 2-year UK credit history, because credit agencies can't reliably check overseas.
A guarantor needs a higher credit rating than a renter and being a homeowner is part of this.

Friends of mine, well-off professionals, had the same problem after returning from Australia:
They had to rent for 2 years, always with 6 months rent prepaid, kept like a big damage deposit, before they could get a mortgage.

MrsWinnibago · 17/07/2014 10:10

YANBU it is a bloody nightmare renting in the UK. DH and I offered a guarantor once...he had a million pounds in his bank account but because he did not own property they refused him.

He was a British Citizen employed by a very well known company for over 5 years. Not good enough though Hmm

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