What Is a Guarantor and When Is One Required?

If you let property in London, sooner or later you will meet an applicant who is a strong fit in every way except one: their income, employment history or credit file does not quite reach the threshold a letting comfortably needs. A guarantor is the usual answer to that gap. Yet many landlords are unsure what a guarantor actually commits to, when it is fair to ask for one, and how to document the arrangement so it holds up if it is ever needed. This guide walks through the essentials in plain terms.

What a guarantor actually is

A guarantor is a third party, most often a parent, relative or in some cases an employer, who agrees in writing to meet the tenant's obligations if the tenant does not. In practice that usually means paying the rent, but a well-drafted guarantee can also cover damage beyond fair wear and tear and other breaches of the tenancy agreement. The guarantor is not a tenant and does not have the right to live in the property; they are a financial backstop.

The key point for landlords is that a guarantee is only as good as the document behind it. A casual verbal promise from a relative carries little weight. A written guarantee, signed as a deed where appropriate and clearly stating what is covered and for how long, is what gives the arrangement real value. This is one of the areas where having an agent involved earns its keep, because the wording and the referencing need to line up.

When asking for a guarantor is reasonable

There is no rule that every tenant needs a guarantor. The request should be driven by the outcome of referencing, not by assumptions about a person. Common situations where a guarantor is a sensible request include students or recent graduates with little earnings history, applicants whose income is sound but falls below the affordability ratio you use, someone new to the UK without a local credit footprint, or a self-employed applicant whose accounts are still building.

It is worth understanding how this fits with the tenant referencing process. Referencing is what surfaces the affordability or credit gap in the first place, and the documents a tenant needs to pass referencing often double up as the evidence a guarantor must also provide. Asking for a guarantor is best framed as a way to say yes to a good applicant who needs a little extra reassurance, rather than as a hurdle.

Fairness and the law

A guarantor request must be applied consistently and for legitimate, affordability-based reasons. Under the Renters' Rights Act and the Equality Act 2010, you must not use a guarantor requirement as a way to screen out families with children or people receiving benefits, and rental bidding is banned, so a guarantor can never be a route to invite offers above the advertised rent. The safest approach is a clear, written policy on when a guarantor is required, applied to every applicant the same way. Our overview of the Renters' Rights Act for London landlords sets out the wider framework these decisions now sit within.

Remember too that a guarantor cannot be charged a fee for the privilege of standing as one. The Tenant Fees Act limits what can be charged in connection with a tenancy, so the cost of referencing a guarantor is yours or your agent's to absorb, not the tenant's or the guarantor's. This is general information rather than legal or tax advice; for anything finely balanced, take professional guidance.

How long the guarantee lasts

One question that catches landlords out is duration. Since fixed-term assured shorthold tenancies have been replaced by periodic tenancies that roll month to month, a guarantee drafted only to cover a fixed term could fall away at exactly the wrong moment. A guarantee should be worded to continue for as long as the tenancy continues, including any statutory periodic continuation and, ideally, any agreed rent increase made by the proper notice. This is technical drafting, and getting it wrong quietly undoes the protection you thought you had.

It is also good practice to reference the guarantor properly, just as you would the tenant: confirm identity, check that they are UK-based so the guarantee is straightforward to enforce, and satisfy yourself they could realistically meet the rent if called upon. A guarantor who could not themselves afford the rent adds reassurance on paper but little in reality.

The corporate alternative

Not every reassurance comes in the form of an individual guarantor. Where the occupier is an employee placed by a company, the company itself sometimes takes the tenancy or stands behind it, which can be stronger than a personal guarantee. This is common with relocation and corporate lets, including the Japanese corporate tenant segment that forms one part of the London market among many others. A company covenant is assessed on the business's standing rather than an individual's, and the paperwork differs, so it is worth treating as its own route rather than a like-for-like swap for a personal guarantor.

Getting it right from the start

A guarantor, handled well, lets you accept a good applicant with confidence rather than turning them away. Handled carelessly, with a vague document and no proper checks, it offers a false sense of security. The difference lies in clear policy, consistent application, sound referencing and careful drafting. If you would like a steady, second pair of hands on referencing, guarantor wording and the wider letting process, our guides on how to find good tenants in London and what a letting agent does are a good place to start, and you are always welcome to talk it through with us.