The Essential Role of Professional Guarantors in Today's Lettings Market with RentGuarantor
In this episode, Reposit’s Gurman Bains is joined by RentGuarantor‘s Michael Hollamby to talk through the important role professional guarantors play in today’s lettings market – discussing changes in the types of tenants that require a guarantor as well as how financial pressures have had an impact on traditional guarantors, like friends and family.
Podcast Overview
Introduction
In this episode of the Rethinking Rentals podcast, Gurman Bains from Reposit is joined by Michael Hollamby, Director of New Business at RentGuarantor. They discuss the crucial role of rent guarantors in the current lettings market, touching on various challenges and solutions.
Role of RentGuarantor
Michael explains that RentGuarantor aims to secure tenancies for tenants while protecting landlords’ investments. Their mission is straightforward, ensuring tenants can move into their desired homes while providing landlords with financial security.
Market Challenges
The conversation highlights the rising challenges in the market, such as renters’ affordability issues and increasing rent arrears. These issues affect landlords, tenants, and agents, making the role of rent guarantors increasingly vital.
Tenant Financial Barriers
Michael shares insights on the financial barriers tenants face, noting that between 12% and 20% of tenants now require a guarantor. This increase is driven by affordability challenges, especially with rents rising faster than salaries.
Changing Role of Traditional Guarantors
Michael points out that traditional guarantors, often parents, are becoming more aware of the responsibilities and risks involved. Many are now either unable to serve as guarantors due to retirement or relocation, or are more reluctant to take on the financial liability. This shift has increased the demand for professional guarantor services like RentGuarantor.
Landlord Perspective
From the landlords’ viewpoint, the concept of a professional guarantor is becoming more accepted. It provides landlords with confidence that rent will be paid, reducing the risk and ensuring steady income.
Professional Guarantor vs. Company Guarantor
The discussion clarifies that RentGuarantor acts as a professional guarantor, not rent protection insurance. This service is free to landlords and agents, with tenants bearing the cost if they need the service, complying with the Tenant Fee Ban Act.
Agent Adoption
Michael notes that agents have had to adapt to the changing market. Educating agents about the benefits of professional guarantors has been crucial. RentGuarantor works closely with agents, offering training and support to integrate their services smoothly into existing workflows.
Future Outlook
Looking ahead, the need for guarantors is expected to grow due to increasing rents and changing landlord demographics. Professional guarantors are predicted to become a norm, offering a secure option for landlords and tenants alike.
