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If you are reading this then chances are you have either been asked to be a guarantor or you know you will have to be one soon. This guide will show you when a guarantor is needed, what’s involved in being a guarantor and the responsibilities that come with being a guarantor.

Letting agents may require a prospective tenant to have a guarantor when applying to rent a property.

When is a Guarantor Required?

Tenants may be asked to provide a guarantor who would be named on the on the lease if:

1. The tenant cannot not meet the affordability criteria.
2. The tenant's credit history reveals issues when a credit check is carried out
3. The tenant does not have the required minimum of three years of credit history in the UK to enable a credit check.

As the word suggests the guarantor basically 'guarantees' and takes financial responsibility for all conditions of the lease should the tenant fail to meet them.

What are the Affordability Requirements for Tenants?

Typically, a prospective tenant must earn a gross annual salary of 30 times the monthly rent to meet the affordability criteria for a property. If a tenant does not meet this requirement, such as in the case of full or part time students or those with low incomes, a guarantor is required to guarantee the financial responsibility for the tenancy. In Edinburgh, where a high percentage of the population are students, guarantors are commonly named on leases.

Who can be a Guarantor?

A guarantor is normally a UK-based relative or close friend who is willing and able to share the financial responsibility of the tenancy. Guarantors usually do not participate in the tenancy meaning that letting agents such as us would expect to deal with the tenants for normal day to day of the tenancy and not involve guarantors unless necessary.  However, they are called upon if any issues arise during the lease. Anyone who meets the financial requirements and credit check criteria can act as a guarantor, but they need to understand that they are responsible for paying the rent and covering any financial damage or loss if the tenant fails to do so.

What are the Affordability Requirements for a Guarantor?

A guarantor must earn an annual gross salary of 36 times the monthly rent amount. They must also pass a credit check, which requires three years of acceptable credit history in the UK. Guarantors will also be required to provide proof of income and a copy of photo identification.

At The Flat Company we work with a company called Let Alliance (https://www.letalliance.co.uk/) who will contact any prospective guarantor ask for all of the required information.

 What is the Liability of the Guarantor?

At The Flat Company we prefer to deal directly with the tenants whenever possible. Even when we know it may be the tenant’s first property. However, a guarantor is jointly and severally responsible for all terms of the lease along with any other tenants and guarantors. This means if one tenant does not pay their rent, the guarantor of another tenant may be liable to pay it (though the non-paying tenant’s guarantor will be pursued first). All names on the lease are equally liable for rent payments and any financial damage or loss. Therefore, tenants should carefully consider who they choose to share a lease with. Tenants and guarantors are also jointly and severally liable for any dilapidations at the end of the tenancy. If one tenant causes damage and refuses to pay for the repairs, the other tenants and guarantors must cover the cost.

If the tenancy runs smoothly, the property is well-maintained, the rent is paid on time, and there are no excessive dilapidations at the end of the tenancy, then the letting agent will not need to contact the guarantor after they have signed the lease.