Tenancy Guarantor Role Explained for Landlords in Rochdale & Manchester

You’ve got great prospective tenants lined up for your rental property in Rochdale or Manchester– but there’s a catch. Maybe they don’t earn quite enough to pass affordability checks comfortably, or their credit history is patchy.

A common solution is to ask for a guarantor – someone who commits to covering the rent if your tenants can’t. In fact, 21% of private renters in England are asked to provide a guarantor, according to the government’s English Housing Survey 2022 to 2023.

If you’re planning to rent to students in Oldham and want peace of mind, or you want additional security that your Newhey or Chadderton tenants will make the rent, read on. We explain the role of a guarantor for a tenancy agreement in our guide.

What is a guarantor for a tenant?

A guarantor enters a legally binding agreement to pay the rent if the tenant falls into rent arrears. They are usually a family member or close friend, though the local council or insurer may act as a guarantor in certain situations. From a landlord’s point of view, a guarantor offers added confidence when renting to tenants with an unproved rental history or lower income.

Responsibilities of a guarantor for a tenancy

The role of a guarantor in an assured shorthold tenancy agreement is to cover the unpaid rent if the tenant can’t. They can also be called on to cover damages or expenses if the tenant breaches their tenancy agreement. If the tenant and guarantor both refuse to pay rent, you can take both of them to court.

When to request a guarantor

It’s usual to ask for a guarantor for tenants whose financial history or income isn’t as strong, or who can’t supply references. Landlords commonly ask for a guarantor in these circumstances:

• Student lets
• No rental history or references
• Low regular income
• Doesn’t earn enough to pass affordability checks
• Poor credit history
• Defaults or county court judgements (CCJs)

Who to accept as a guarantor?

Landlords should check that a guarantor can afford to meet their responsibilities by running financial checks and taking references – as you would with a tenant. Someone acting as a guarantor would typically have a minimum income that’s 3 to 4 times the monthly rent amount as well as being homeowners, based in the UK, with references and a good credit score.

What should a guarantor tenancy agreement include?

A guarantor tenancy agreement should make it clear whether guarantor’s responsibility only covers rental payments, or extends to other costs like damage to the property. In a joint tenancy, the agreement should clarify if the guarantor’s liability is only for one joint tenant’s proportion of the rent.

You should include a rent increase clause in the tenant’s guarantor agreement. Rochdale properties have recorded some of the fastest-rising rents in recent years, as reported on the BBC website, so local landlords should make provision for rent rises in any tenancy agreement with a guarantor. On a related note, set out how long the guarantor agreement will last.

Landlords can find a UK guarantor template online to use as a guide for your own form, but seek expert assistance to prevent oversights.

How long does a guarantor stay on a tenancy agreement?

The exact wording of the guarantee determines how long the guarantor stays on the tenancy agreement. It’s usual to tie a guarantor agreement to an initial fixed term, or set points where the guarantor can break off their commitment. For example, if the rent rises past a certain level.

Does a guarantor need to sign the tenancy agreement?

A written guarantee must be signed by the guarantor once they have read the tenancy agreement. If there are joint guarantors, it’s important that the agreement is signed by all guarantors or it won’t be binding.

Can a guarantor remove themselves from a tenancy agreement?

Guarantors can’t end the tenancy and can’t remove themselves from the tenancy agreement without the landlord’s permissions. However, it can be possible for a guarantor to leave the agreement in these situations:

• If there’s a termination provision in the deed of guarantee.
• Depending on the conditions, if the terms change such as a rent increase.
• If they find an alternative guarantor to take over the role.
• Where the landlord or tenant has been declared bankrupt.
• If they agree to pay the landlord rent in advance.
• When the contract ends and a new tenancy agreement begins.

Bringing in a guarantor can give you more confidence to rent to certain tenants, but you may still have questions about how guarantor agreements work. If you are a landlord in Bamford, Royton, Norden or elsewhere in the Rochdale and Manchester areas, contact Cowell Norford.

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