In short: A guarantor is genuinely necessary when referencing shows a real affordability or track-record gap, students, tenants on probation or irregular income, first-time renters, or applicants with no UK credit history, not as a routine box-tick for every applicant. Guarantors add a legal safety net but come with their own referencing burden and can be hard to enforce; rent guarantee insurance is often a cheaper, simpler alternative. A blanket “guarantor required for everyone” policy can also expose you to discrimination risk if it disproportionately screens out certain groups.
When a guarantor is actually justified
Referencing agencies (Goodlord, HomeLet, Rent4Sure and similar) will usually flag a guarantor requirement automatically when one of these applies:
- Income below the affordability threshold. The standard rule of thumb is gross annual income of roughly 30x the monthly rent. If an applicant’s income sits below this, a guarantor (typically required to earn around 36–50x the monthly rent themselves, depending on the referencing provider) closes the gap.
- Students. With no employment income and often no credit history, students are the most common guarantor case, usually a parent or family member.
- Irregular or new income. Recently self-employed, on a probationary contract, zero-hours, or between jobs, income exists but isn’t yet proven stable enough to satisfy a reference.
- No UK credit history. Recent arrivals to the UK (including returning expats) often have a thin or non-existent UK credit file, which isn’t a red flag in itself but makes a credit check inconclusive.
- First-time renters. No previous landlord reference to draw on, so there’s no track record of paying rent on time.
- Marginal credit issues. Historic but resolved defaults or a low credit score that doesn’t quite fail outright but adds risk.
In each of these cases, a guarantor is a proportionate, evidence-based response to a specific gap, not a blanket policy.
What guarantor referencing should involve
A guarantor should be referenced almost as thoroughly as the tenant:
- Proof of identity and UK residency (many referencing providers require the guarantor to be a UK resident, as enforcing a guarantee against someone overseas is difficult)
- Income verification (payslips, employer reference, or accountant’s reference if self-employed)
- A credit check
- Signing a Deed of Guarantee, a formal legal document, ideally executed as a deed and witnessed, that clearly sets out what the guarantor is liable for (rent arrears, damage, sometimes costs of legal action) and for how long the guarantee runs (a fixed-term tenancy only, or into any statutory periodic tenancy that follows, this needs explicit wording or the guarantee may not extend past the fixed term)
A poorly drafted guarantor agreement is one of the most common reasons landlords fail to recover money from guarantors later, so it’s worth using a solicitor-drafted template rather than a generic download.
The limits of a guarantor
Guarantors are not a silver bullet:
- Enforcement takes time and money. If a tenant stops paying, you still generally need to go through the same possession process (see our guide to ending a tenancy after Section 21 on Section 8, now the only eviction route since Section 21 was abolished from 1 May 2026) before recovering losses, and then potentially pursue the guarantor separately through the courts if they don’t pay voluntarily.
- Guarantors can dispute liability. If the tenancy has rolled from fixed-term into a statutory/contractual periodic tenancy and the guarantee agreement didn’t clearly cover that period, a guarantor can argue their liability ended when the fixed term did.
- It doesn’t replace proper referencing of the tenant. A guarantor should supplement a weak but plausible application, not substitute for checking the tenant at all.
Rent guarantee insurance as an alternative
For landlords who want the security a guarantor offers without the administrative burden (or in cases where a suitable guarantor genuinely isn’t available), rent guarantee insurance is a common alternative:
- Typically costs somewhere in the region of 2–5% of annual rent (premiums vary by provider, tenant risk profile and level of cover), and usually also includes legal expenses cover for possession proceedings.
- Requires the tenant to have passed referencing before the policy is valid, so it works alongside, not instead of, the checks in Q17.
- Pays out on rent arrears (and sometimes legal costs) regardless of whether a personal guarantor would have been able or willing to pay.
- Can be a more predictable cost than chasing an individual guarantor through the courts.
Many landlords now default to rent guarantee insurance as their standard safety net and reserve personal guarantors for cases where the tenant specifically needs one to pass affordability (e.g., students, low income) rather than treating the two as interchangeable for every let.
The discrimination risk of a blanket guarantor policy
This is the point many landlords miss. Under the Renters’ Rights Act 2025, it is unlawful to apply a blanket practice that has the effect of screening out tenants because they’re benefits claimants or have children, even if that wasn’t the intent. A policy of “every applicant must provide a guarantor” can inadvertently fall into this trap if:
- It’s applied more strictly to, or has a disproportionate impact on, applicants on Universal Credit or housing benefit (who are statistically more likely to be women, disabled, or families, the same reasoning that made blanket “No DSS” policies unlawful indirect discrimination under the Equality Act 2010, following the 2020 York County Court ruling)
- It isn’t genuinely linked to an individual affordability or referencing shortfall, but is instead applied automatically regardless of whether the specific applicant actually needs one
The safer approach is to apply the same affordability and referencing standard to every applicant, and require a guarantor only where that individual’s referencing outcome genuinely justifies it, documenting why, so you can show a consistent, non-discriminatory process if ever challenged.
Bottom line
Use a guarantor when referencing identifies a specific, explainable gap, not as a default hurdle for every tenancy. Reference the guarantor properly, use a solid Deed of Guarantee, and consider rent guarantee insurance as a lower-friction alternative or complement. Above all, keep your policy consistent across applicants so it can’t be read as a proxy for excluding benefits claimants or families.
Related reading
Sources
- Tenant Fees Act 2019: guidance for landlords and agents, GOV.UK
- Code of practice for landlords and their agents: the right to rent scheme, GOV.UK
This is general information, not legal, tax, or financial advice. Rules referenced are accurate to the best of available information as of July 2026 for England unless stated otherwise. Always check current government guidance (gov.uk) or consult a solicitor for your specific situation.
Last Updated on September 21, 2026