£75k salary, landlord wants parents as guarantors

[Sadleaver]

I'm 35, earn £75k a year in a stable industry, as a permanent member of staff. I've been renting for 12 years and have glowing past landlord references. Excellent credit score.

Just agreed a new tenancy on a flat after a stressful 6 week hunt. It's £1250pm. Passed all the reference checks. And the letting agent is now asking for my PARENTS to be guarantors! I have to provide evidence of their income and it has to be above a certain amount. I'm honestly done with this bullshit. This is insane right?

It's awful. Totally understand why with interest rates but the Guarantor contracts LAs use are a throwback to very different times! A best friend was recently in that position and asked me to be a guarantor. Considered it but wanted time to read both the rental agreement and guarantor agreements. Mysteriously both were delayed until hours before key hand over. When the contract arrived, was chased but refused to sign until I had read every word and had space to think which delayed the move. Thank god I did as the Guarantor contract was appalling.

After the initial rental period the guarantor is stuck being a guarantor in perpetuity. Under no circumstances can they request to come off at end of contract! The renter can continue to re-new for decades and you are still listed as Guarantor.

In the end, I offered to pay 6 months rental up front which was snapped up by LL and Agent. Friend would simply pay me monthly. More fool me, not received a dime and never took any of my phone calls. Still better then being liable for paying their rent and having a black mark on my file making it hard for me to re-morgage!

The whole thing seamed fishy, with rising rates, LL getting 6 months up front on a 6 month AST means they could overpay mortgage at lower rates, and in 6 months not renew, and find another mug to do the same again. LL happy, LA happy. Renters screwed!

I had to ask my retired father to go guarantor for me four years ago at the age of 40(!). He was retired on a pension and I had just sold a property so had several hundred thousand sitting in the bank.

But hey…

LL getting 6 months up front on a 6 month AST means they could overpay mortgage at lower rates,

That isn’t how it works. The agency holds the money and passes it on to the landlord a month at a time.

The LL was OK to let her DD be the 5th tenant without a guarantor as she was happy with 4 out of 5

@SweetBirdsong I'm sure the landlord was happy with 4/5 because usually student lets are joint and several liability contracts (ie all tenants and their guarantors are legally liable for the entire rent for the property, not just their "share") so when your BF's DD didn't pay up, the landlord could have chased her DD's friends or their guarantors for her DD's debt. Whilst it was a smart decision for your BF to avoid taking responsibility for her feckless DD's behaviour, she was actually making it the responsibility of her friends' parents. Lucky for them that the landlord didn't chase them straight away and let her DD repay the money over time. I hope her DD realises she wasn't just screwing over the landlord, she was screwing over her friends and their families.

Not 100% sure of this as advanced rent is not part of the Deposit Scheme. Also know from friends who rent explicitly to an agency that deals with Expats that pay up front as there is no credit history and he gets this in full from Agent.

I went though all my friends paperwork and there was nothing that stated his advanced rent would be looked after in any form of Escrow like their deposit. Don't even think there is a scheme for this, so what happens if the Agency goes belly up if they are keeping the funds?

No idea. But that’s what happened when I rented my parents’ house out. The tenants paid six months rent up front and fed it into my account a month at a time.

Landlords are needing to do this for security reasons.

A home owner guarantor can have any debts set as a charge against their own property.

Tenants including high earners have just left properties without notice and rent arrears.

The 5 week deposit cap in most cases will not cover damages especially where pets are involved.

An abandoned property, rent arrears, rubbish clearance. Redecoration, repairs will often run into thousands.

It's not great foe renters but Landlords are subject to tax at ridiculous levels unlike other businesses

It's not great foe renters but Landlords are subject to tax at ridiculous levels unlike other businesses

Are they? Not in my experience and as a pp pointed out landlords can take out insurance for £150 which would cover most eventualities and can even be set against tax.

@emark
Landlords are needing to do this for security reasons

Exactly. It's only an issue IF the renters default on the rent. If you aren't going to default then what's the issue?

(It's different if guarantors are being asked to take on unknown flatmates such as those in student flats)

Tongue in cheek sort off but....

I guess, from a LAndlord's POV, there's nothing to stop you spending £75k on cars, drink and loose women then wasting the rest and leaving him in the lurch.

This is madness. Interestingly my ex h and I were applying for a mortgage about 20 years ago and one of the deals wanted a guarantor. We couldn’t ask my parents as my mum was singly managing a huge mortgage due to buying my dad out in a divorce. He was retired on disability benefits. We asked his parents and they point blank refused as they didn’t want the responsibility if we deferred - insinuating they didn’t trust me. I’ve always been the higher earner and more sensible with money. Fast forward 20 years and we are divorced. When we bought my current house I actually took the mortgage out in my name as he didn’t pass credit so we got a cheaper house than planned. Several years after moving in and having 2 children he walked out leaving me with a mortgage that I could pay but no chance of selling as no equity built up due to house price crash. He now rents and is constantly in debt!

currently though if my kids needed to rent and get a gaurantor I would not pass credit check as a part timer single parent!! I own my house outright due to a recent inheritance but my kids would be stuck if they needed my income to be £2k.

Longwhiskers · Yesterday 17:34
We earn over 100k together and have just been through this with a rental. We put my brother in law down as guarantor. I just assumed it is standard work for the agency and it doesn’t depend on salary - one size fits all kind of thing. My BIL was laughing about it.

Wouldn't be laughing if you defaulted.

I know my Dad would've expected me to say "Well I can try digging them up but I'm not sure they'll be able to hold a pen..."

Both my parents had died by the time I was 35! I guess they're looking for someone to underwrite the rent should you fall ill so you don't default but really you could, and should, have enough money in the bank to cover this eventuality anyway so it's ludicrous.

There are companies already offering this service.
It's like most insurance schemes for landlords, the devil us in the detail and it's frequently very difficult to claim

Out of principle I would tell them to “do one”, the problem is if tenants allow landlords to get way with this appalling behaviour it will continue. I would report the letting agency to ARLA and tell them you have do so

You know we have very very little choice right now? There’s lots protecting us, but not enough houses to go round and not enough within catchments of the schools your kids go to, near their mates, that allow their rabbit to come. That has room for their trampoline.

all that within budget. You can try and not accept it, but the landlord holds the cards, they literally hold the keys to your child’s stability and roof

I looked into these companies when the LL asked for joint and several parental guarantees for a student flatshare. As other posters described earlier, that is an unacceptable risk for me to guarantee that dds' 4 other friends pay up their rent. I was only prepared to guarantee my dd's share of the rent but the landlord/agent would not consider it.

These guarantor companies' guarantees are not worth the money they are written on. They are literally shell companies with no capital behind them. If they blatantly refuse to pay and you sue them on the policy, you will recover nothing.

The best thing is if you could pay a small fee for these companies to guarantee the landlord directly. If the landlord is prepared to accept their guarantee (more fool him), who cares whether the company pays up in the event of a default.

Well let’s hope they don’t want to go to Uni then especially if they are doing a course where they cannot work many hours.

They’re already there???

So how do they rent a house if they don’t have a guarantor?

Their dad (we are not together). I can’t afford to be anyone’s guarantor.

This is mad.

Probably is because you're single. They want some recourse if you get sacked/sick/redundant etc.

Happened to me with my first private let after uni. Was renting a flat for 750pcm with my then partner. We had a joint income of 65K and both had professional jobs. We both had good credit ratings and good references from renting rooms whilst at uni etc.

They asked for our parents to be guarantors. I basically just said no. That we were well above their affordability calculations and had good references & credit ratings and professional jobs (they did employment checks). Told them if they required a guarantor we would just find somewhere else to rent. Funnily enough they managed without after all.

Stand your ground you're an ideal tenant and they're being OTT and I expect they well know it.

The landlord should have landlord insurance

Unless they have been burnt by previous tenants who have not paid

@Sadleaver you can usually get around this by paying 6 months rent up front. Of course so many people can't do that. But it typically is the way to not have a guarantor.

Ask them for the landlords mums financials too so you can be sure they can afford to rent to you and make any repairs needed. Honestly I'd just reply explaining how ridiculous that is and you're not doing it. Whether they rent to you or not is then up to them. Unless you really do want it/need it then I guess you'll have to play the game with this idiot but prepare for them to do further shenanigans down the road.