We’re getting close to winter – and for most, finances get tighter. More Landlords than ever are actively seeking rent guarantor services, but why?
Truthfully, the answers pretty simple. Christmas is around the corner, and with the current energy crisis, people are counting pennies now more-so than ever before.
Many Landlords are seeking a safety net to protect them from potential non-paying tenants and rightly so.
What methods are Landlords using?
In order to make sure that the tenant’s are reliable and can afford their rental payments, some Landlords have adopted harsher screening processes. This means credit checking tenants or falling back on previous Landlord references.
Others have felt the need to purchase insurance policies that protect them against loss of income through non-paying tenants.
This is also a good alternative as some insurance providers like Alan Boswell actually serve section notices and cover legal expenses, should the need for it arise.
Another option is relying on the help of Rent Guarantor Services, who’ll step in and act as a guarantor for tenant’s who can’t actively keep up with rental payments and have fallen into arrears.
Unfortunately, this has become a tricky situation for tenants actively seeking a new home.
Due to legislative changes and the interference of the public sector, some Landlords aren’t willing to take the financial risk of being lenient when it comes to tenant selection.
This ultimately makes it more difficult for those who are looking to rent, especially if they have previous history of non-payment.
The Purpose of Rent Guarantor Services
A Rent Guarantor Service is a private limited company that’ll essentially act as a guarantor on behalf of a tenant.
A Rent Guarantor could also be an individual like a parent for a student let, or even a friend or business partner.
However, being a Rent Guarantor is legally binding so they must have sufficient income to cover the rent in the case of a default by the tenant,
This means in the event of non-payment of rental fees, the guarantor will step in to resume regular payments of rental income to the Landlord.
These types of services help secure tenancies and acts as a very valuable tool to helping Landlords protect their investments.
What is Rent Guarantee Insurance?
A great alternative to guarantor services is Rent Guarantee Insurance. Their policies are designed to protect a Landlord’s income in ethe vent of a tenant defaulting on rental payments.
Now… What’s included in your policy depends on who you’re insured with and what you choose to include in your cover.
We’re partnered with Alan Boswell Group, who provide a fantastic package from just £160* per property.
Here’s what they include in each rent guarantee insurance policy by default…
Why have they become so popular?
We’re in the middle of a cost of living crisis, alongside OFGEM raising the energy price cap. Households are now paying costly amounts for the essentials like gas, water and electricity.
With the holiday period rapidly approaching, the financial belt has tightened and some renters have found that their budgets have suddenly shrunk.
Tenants are slowly creeping into rental arrears and Landlords are certainly feeling the pinch, too.
Many Landlords, like previously mentioned, feel more secure with the right failsafes in place.
Landlords are certainly not immune to the cost of living crisis and the majority rely on a steady income of rental payments from their existing tenants.