I’ve been a landlord for 9 years and was very concerned at the start about not making a mistake, hearing the various horrors stories. So your wariness is understandable.
I can’t tell you what to do, only offer what my thought process is. I view getting tenants as a risk management process where I’m trying to guard against the risks of rent not being paid, of the property not being looked after and whether I’m likely to have a good relationship with the prospective tenants.
I place quitea lot of emphasis on references from previous landlords. If someone has a track record of paying on time and looking after a place, I weight that higher than the results of an affordability check which is only an indication. So I want to know if anything has changed such as you now wanting a higher rent, if someone had changed jobs which might lead to more risk that they won’t cope so well in your property. I think, all other things being equal, if someone had paid for 5 years they are probably going to continue ok.
Sounds like this couple are also offering other ways to mitigate your risk such as the guarantor, so that is another way to mitigate your risk.
So I’d suggest you look at their application in the round and think how you feel about the things that make you comfortable about them against the things that are perhaps a worry. With the exception of someone clearly not telling me the truth - which is bye bye to the highway in my book- I’d don’t think any single factor would sway me one way or the other.
In terms of housing benefit, my two penneth is people tend to have problems only when they start claiming or their circumstances change, when they are somehow expected to bridge the period when the government won’t cough up any money. And you could easily find yourself in this situation if someone loses their job. So I’m pretty relaxed about people in low paid work getting to ups, since I’ve never really found it to be a problem. And outright discrimination against people trying to make ends meet in a low pay situation also personally grates with me, but others may think otherwise.
If at the end of al that you want to be cautious you could always limit the fixed period to 6 months so you have an out- albeit via section 21 - if it does not work out.
Hope this helps. Sorry for the ramble.