Rental Guarantor
What is a rental guarantor?
A rental guarantor is someone who will guarantee that you will pay your rent on time. And they will guarantee that the cost of any damage to the property, over and above the amount covered by your security deposit, will be paid for.
If you default on your rent, or cause damage to the property that you are unable to pay for, the guarantor will be liable for any of your unpaid costs.
If two or more tenants are sharing a house or flat, and therefore sharing the rent, your guarantor will be guaranteeing to cover the cost of all shares of any unpaid rent.
You will need a guarantor to rent with New Mills Properties if you:
- are renting a flat or house, or
- are renting a room and
- want to take advantage of our lower security deposit offer and/or
- have a low income
Why do I need to provide a rental guarantor?
We understand how frustrating it can be to be refused a tenancy because you are unable to find a suitable guarantor, especially if you really love the property and have always previously paid your rent on time.
For New Mills Properties, it is about managing risk.
We understand that sometimes life happens, and through no fault of your own you can find yourself in a situation where you are in a bit of a financial bind. It can, and does happen to anyone from time to time.
A guarantor simply reassures us and your landlord that if the worst happens we have the option of turning to someone else to recover any unforeseen losses.
Can I rent without a guarantor?
If you have a sufficient annual income, have a good credit history and have excellent references we will consider renting one of our rooms in a shared house without a guarantor. You will need to pay the maximum allowed security deposit, which is the equivalent of 5 week’s rent.
If you are unable to provide the higher security deposit for a room or are unable to find a guarantor for any of our other properties we will be unable to progress your application.
Who can be a rental guarantor?
A guarantor is usually someone that you know well, like a close friend or a relative. You must ask their permission before nominating them as a guarantor.
Guarantors will need to either own their own home or have an income that is high enough to cover any arrears.
We will check whether someone is suitable to be a guarantor.
Home Owning Guarantors
If you tell us that your guarantor is a homeowner we will check that with the land registry. They are likely to be accepted as a guarantor. If they are unable to cover your rent arrears through their income we will make a claim against the value of their house.
Working Guarantors
If you tell us that you have a working guarantor we will
- Confirm with their employer or accountant if they are self-employed – annual salary and that their role is not due to end soon.
- Check their pension income if they are retired.
- Ask to see a recent credit report that identifies any IVAs, Trust Deeds, Bankruptcy Orders and CCJs they have.
To check that someone is earning enough to be a working guarantor you should take the monthly rent and multiply it by 36. This will give you the gross annual income that a guarantor will need to earn to demonstrate that they can afford to cover any rent arrears.
For example: – monthly rent of £500 x 36 = gross annual income of £18,000
A working guarantor will be rejected if they are not earning enough or if they have a poor credit history
How long does a rental guarantor last?
A guarantor lasts through the life of the tenancy. If you need to renew your tenancy for any reason, your guarantor will need to agree to the new terms too.
If your guarantor moves house or changes their job you should let us know straight away.
Can my guarantor be changed?
We understand that circumstances change, particularly if you are renting with us for a long time. If you need to change your guarantor we ask that you provide another guarantor of equal standing.
Where can I find more information about rental guarantors?
There is lots of advice around the Internet about guarantors but you might like to check out these links.
Check out the properties that we currently have available on our Property Search page or read more advice about renting with us on our Tenants page. If you are concerned about moving during the current pandemic, please read our Coronavirus Guarantee.
Photo by Romain Dancre on Unsplash
