The number of landlords asking non-student tenants to provide a guarantor has risen by 36% since January 2018, says Goodlord.
A survey of 730,000 tenants shows that in 2018, landlords asked only 9.8% of employed prospective tenants for guarantors compared to 13.5% in 2021.
The biggest jump was between 2019 and 2020 – the onset of the pandemic – when this figure rose from 9.3% of landlords to 11.9%.
In the West Midlands specifically, the 2018 to 2021 number jumped from 6% to 14.9%, which was the region seeing the biggest rise, whereas in the East Midlands, the number fell from an already relatively high 17.4% to 11.8%.
Goodlord managing director of referencing Blake Richmond says: “
“There are two main reasons behind this [notable rise]… first, the pandemic and subsequent evictions ban created a lot of uncertainty in the market in 2020.
“Since then, rents have been rising faster than wages in real terms, meaning more tenants are spending a greater proportion of their salaries on rent and, thanks to the ‘race for space,’ more tenants are stretching their budgets.
“Combined, these factors have shifted market behaviours and landlords are seeking additional assurances during the referencing process.”
And Propertymark chief executive Nathan Emerson adds: “Not only have tenants faced financial difficulties, but it’s important to remember that many landlords will have as well – considering that 54 per cent of landlords have buy-to-let mortgages and nearly half of all landlords have only one property.
“Additionally, even before the pandemic, changing legislation and the onset of tax changes have impacted landlord’s costs so it’s not surprising that we are seeing a rise in landlords requesting rental guarantors to give a greater level of protection should a tenant fall into arrears or default on the tenancy agreement.”
