As fall approaches, rent arrears are expected to rise as uncertainty over soaring energy bills and fuel costs exacerbate the current cost of living crisis.
Rent guarantor service, RentGuarantor, said it is seeing increased demand as landlords turn to the guarantor option to broaden the pool of potential tenants they would rent to and mitigate the risk of lost revenue.
A perfect storm of new legislation, rental income tax and rising house prices have pushed landlords to sell properties, further limiting tenants’ options in the market. Landlords are essential to the demanding rental sector. Landlords and increasing the housing stock are key to addressing the current shortage of housing capacity.
The Rental Index report from HomeLet and DataLoft echoed this sentiment as they found that 18% of all landlords surveyed expected to downsize their portfolio or exit the industry altogether in the short term – that figure rose to 22% for London-based owners. What’s more, what makes the need for guarantors even more pressing is that the fear of being late is also shared by renters, with new research from HomeLet revealing that 78% of renters worry about how they will pay their rent.
Paul Foy, CEO of RentGuarantor, comments: “The simple fact is that the rental market will not improve without more rental stock. For this to happen, we need to support owners of external circumstances that can impact rental income. Ownership should again be seen as an attractive option, with less risk and more rewards. It is simply not viable for the market to continue as it is now, where tenants secure properties by offering up to 12 months rent up front, which is impossible for many tenants who may have -be struggling to make ends meet.
“Due to the effects of the cost of living crisis, the demand for guarantors is even more important and beneficial for landlords who are concerned about the possibility of rent arrears. The additional guarantee of no loss of rent makes it more attractive for landlords to stay or even enter the rental market.