In order to be able to rent privately, tenants will undergo close scrutiny of their finances by landlords so that they are satisfied with the tenant’s ability to pay rent on time in the long run. The aim of this blog post is to learn whether or not a private tenant needs a guarantor if they are able to pay 6 months; rent in advance to their landlord or letting agent. Additionally, we will also explore the reasons why a guarantor is needed and if there are any alternatives available to those who are unable to find one.

Do I Need A Guarantor If I Pay 6 Months’ Rent In Advance?

There is no surety as to whether or not you will need a guarantor if you pay 6 months’ rent in advance as a lump sum payment on its own does not give a landlord the guarantee of a regular income for their tenant or if rental payments will be regular in the future.

While some landlords may waive off the need for a guarantor if a tenant is able to pay 6 month’s rent in advance due to an indication of their financial stability; others may consider this a red flag when the tenant’s financial records are not satisfactory, yet they prefer to offer a lump sum amount rather than offering a guarantor on their behalf.

Therefore, whether or not a tenant needs a guarantor if they pay 6 months’ rent in advance will depend on two key factors:

  • their landlord and how flexible the tenancy contract they’ve made
  • their bank statement which can indicate a regular source of income

There is also a possibility that if you pay your first rent in advance for 6 months, the landlord can ask you for another lump sum payment at the end of the term and you may not be able to come up with the amount for the second time around.

If your landlord insists on the need for a guarantor despite your offer for a 6-month advance payment for rent or at the end of the 6 months, you might have to search for one either through friends or family or an independent guarantor scheme.

Does Everyone Need A Guarantor To Rent Privately?

No, everyone does not need a guarantor if they intend to rent a private property. Guarantors are usually required by landlords or letting agents in the following situations:

  • the tenant is a student or young person renting for the first time
  • the tenant is unable to provide sufficient evidence of their financial stability and ability to pay rent on time

If a tenant is able to prove their reliability to their landlord with the following documents, they may not need a guarantor to rent a private property:

  • recent bank statements that indicate an account balance that can cover future rental payments
  • a letter of reference from their employer that confirms the tenant’s employment status
  • the tenant’s pay slips showing their income and ability to afford rent
  • the tenant’s accounts, if they are self-employed
  • the tenant’s proof of benefit payments, if any

Why Do I Need A Guarantor To Rent Privately?

Guarantors are needed by private tenants if they are unable to pay their rental deposit or advance or if their bank statement indicates low or irregular income due to which a landlord or letting agent is uncertain about their ability to pay their rent on time and on a regular basis.  

Therefore, there is a financial risk for someone who chooses to be a guarantor as they would not only be responsible to make rental payments on behalf of a tenant but can also be taken to court by the landlord in the case of rent arrears by the tenant. 

If you are a student who is seeking a guarantor due to a lack of credit history or since you are renting for the first time, you can check with your University if they offer a Rent Guarantor Scheme and act as the guarantor on your behalf.

What Should I Do If I Can’t Find A Guarantor?

If you are unable to find a guarantor, you can seek help and support from your local council office. They will be able to offer you financial support in the following ways:

  • A Rent Deposit Scheme through which financial aid is extended to those who cannot afford a rent deposit. The applicant receives the entire amount in advance and repays it in instalments.
  • A Rent Guarantee Scheme that provides a written guarantee to your landlord confirming your inability to make an immediate cash deposit and your commitment to pay the amount over some time. 
  • A Deposit Replacement Scheme gives tenants the option to make alternate payments instead of the tenancy deposit. They have the option to make a one-time lump sum payment instead of their tenancy deposit or pay an extra amount on top of the monthly rent.
  • There is also the option of Discretionary Housing Payments extended through local councils. Being at the discretion of council offices, these are one-time, non-refundable amounts for residents claiming Housing Benefits or Universal Credit and may be used to make housing payments.

Conclusion:

The above discussion highlights the variation in situations when a guarantor is needed by a private tenant which brings us to the conclusion that there is no surety that a tenant offering 6 month’s rental advance will not need the services of a guarantor by their landlord or letting agent. This is the reason why, in cases where the need for a guarantor is part of the tenancy agreement, individuals will have to seek the help of family or friends to fill the role. Otherwise, they may have to seek an independent guarantor through a guarantorship scheme.

FAQs: Do I Need A Guarantor If I Pay 6 Months’ Rent In Advance?

How many months in advance can you rent?

It is common for new tenants to pay rent for the first two months of their tenancy in advance and even before they move in. After that, you continue paying advance rent for each month until the end of your tenancy agreement.

Can a landlord ask for 6 months’ rent in advance in the UK?

Yes, a landlord can ask for 6 months’ advance in the UK; as long as there are no hidden charges included in this amount and it only covers future rental payments.

Can a landlord refuse a guarantor?

Yes, a landlord can refuse a guarantor if they are not satisfied with their credit check or bank statements.

Does a guarantor need to be employed?

While it is not essential for a guarantor to be employed, it is expected that they have a regular source of income or sufficient savings to step in for rental payments if a tenant fails to do so.

How much does a guarantor have to earn?

While there is no fixed amount that a guarantor is required to earn; however, most landlords expect a guarantor to earn 40 times the value of the rent. If they are homeowners, this amount can be significantly reduced.

References:

Is it better when taking on a new tenant to ask for six months’ rent in advance or a guarantor?

Will Most Agencies Accept 6-Months Rent Upfront Instead of Needing A Guarantor If Not Working?

‘My landlord wants six months’ rent upfront’ – BBC News

Private Rental (updated April 2020) – GOV.UK.

What was missing from this post which could have made it better?