The rental market in the UK has seen a significant shift, with even high-earning tenants now increasingly being asked to provide guarantors. This trend, as highlighted by recent research from Goodlord, a rental platform, underscores the changing dynamics in the property rental sector.
The research indicates a startling increase in the number of renters earning between £50,000 and £74,999 being asked for guarantors. In 2023, individuals within this income bracket were 82.3% more likely to need a guarantor compared to three years ago. Specifically, 2.68% of these tenants were asked for a guarantor in 2023, a jump from just 1.47% in 2020.
Even Higher Incomes, Same Story
For those in an even higher income bracket, earning £75,000 to £100,000, the trend is similar. In this group, 1.72% were asked for a guarantor in 2023, a significant 187% increase from the mere 0.6% in 2020.
Behind the Trend: A Shift in Landlord Preferences
Oli Sherlock, the managing director of Insurance at Goodlord, explains this shift. Previously, guarantor requests were primarily aimed at students or those appearing to rent beyond their means. However, the pandemic has broadened the spectrum, with landlords and agents seeking additional assurances from a wider range of tenants, including those with higher incomes.
The trend reflects landlords’ response to the uncertainty and regulatory changes over the past four years. Seeking extra security through guarantors, though potentially frustrating for financially capable tenants, is seen as a rational move by landlords facing an unpredictable market.
While the use of guarantors is essential for a stable rental market, Sherlock advises against its excessive or unnecessary application. Agents and landlords are encouraged to use this practice judiciously.
The Overall Increase in Guarantor Requests
The general tenant population has also experienced a modest increase in guarantor requests, from 17.7% in 2020 to 18.4% in 2023.
Notably, renters under 30, who constitute over 55% of the renting population, are nearly 8% more likely to be asked for a guarantor today compared to 2020.