OpenRent Community

Income of guarantor

I have been trying to let my first property for about 3 weeks. It was listed as no DSS but I have been approached by someone who is working and claiming housing benefit to top up. They have offered a guarantor. The rent is £1200 a month so how does that work with the guarantor’s income. How much would the guarantor need to be earning annually to pass referencing.
Thanks

Hi! For guarantors, the affordability ratio is around 4:1. I.e. if the rent is £1,200, to be paid by one tenant, who is providing one guarantor, then that guarantor would need to be earning £1,200 * 4, which is £4,800 monthly.

There are other factors which may affect this, too, and if you wish to discuss them with our referencing partners, then you can call Rentguard on 01227 467 250.

Sam

Hi Maz & Sam,
Hope you don’t mind me building on this thread, but I’ve just seen my first prospective tenant, (the wife of) a middle-aged couple accompanied by her son, daughter-in-law and year-old grandson. The son and daughter-in-law, who both seem to have good career-type jobs, explained that they wanted to stand guarantor for the middle-aged couple who have a joint income of £2,000, but are paid in cash.
They all seemed like genuine people, so my question is this: If I went down the guarantor route, and the son and daughter-in-law passed referencing, would I be able to get the £89 rent guard insurance product?
Chris.
BTW, the rent is £900/month

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Hi Chris,

My understanding is that access the rent insurance, every tenant must either:

  • pass referencing, or
  • provide a guarantor who passes referencing

So here it sounds like you’re asking whether a co-tenant can also be a tenant’s guarantor. I’m afraid not. That doesn’t make much sense legally because of the concept of joint and several liability. This is the idea that all signatories, be they tenants or guarantors, are jointly liable for the entirety of responsibilities of the tenants. Any individual tenant could be pursed via the courts for the entire rental value of any arrears, even if they themselves only usually paid a quarter of the total rent every month.

Given this, it would not add any additional protection to the landlord to add a tenant as a guarantor for their co-tenant, since the tenant is already jointly and severally liable. I hope that makes sense.

In order for this tenancy to quality for the RGI, the middle-aged couple would have to either pass referencing or provide a guarantor who passed for them.

Sam

Hi Sam,
Thanks for your response. Perhaps I haven’t been clear enough.
The prospective tenants are the parents of one of the prospective guarantors (the son). Both the son and his wife have offered to be guarantors for the older couple
The son and daughter-in-law will not be tenants.
Chris.

Oh! Gotcha. In that case, yes; the tenancy will be eligible for RGI as long as the younger couple pass the guarantor referencing.

Sam

Thanks for the clarification Sam.

I have now met this tenant and would like it o rent to her. She works part time and will be claiming housing benefit to pay some of the rent, she has offered a guarantor who’s salary is 3 times the annual rent. I realise this is not enough to get the rent guard insurance but can I still have her as a guarantor? And I would still reference the tenant and the guarantor?

I would allways reference both

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Yes, I would reference both as this is best practice. In general, having more people on the tenancy means more security.

It is possible that the guarantor could still pass the referencing by the way. It depends on a few other factors like how much they are spending on their own housing, etc.