Third-Party Guarantor Services

If you do not have a suitable personal guarantor, some companies offer a third-party guarantor service. These services act as your guarantor for a fee, providing reassurance to landlords and letting agents that rent will be paid if you are unable to meet your obligations under the tenancy agreement.

 

How do Third-Party Guarantor Services Usually Work?

  1. Application and Assessment
    • You complete an application and provide details about your income, student status, and proposed tenancy.
    • The guarantor company will carry out affordability and referencing checks before deciding whether to approve your application.
  2. Approval
    • If approved, you will usually have a period of time to secure a property and provide the tenancy details.
    • The guarantor provider will then contact the landlord or letting agent to confirm they are willing to accept the company as a guarantor.
  3. Agreement and Payment
    • Once accepted, you sign the guarantor agreement and pay the required fee.
    • Most providers charge a one-off fee, often equivalent to around three to four weeks' rent, although costs vary between providers.
    • Some providers offer instalment payment options, subject to eligibility and lender approval.

 

What does the Third-Party Guarantor Cover?

Coverage varies between companies, but third-party guarantors typically agree to cover:

  • Rent arrears if the tenant fails to pay rent.
  • Certain tenancy breaches where the landlord suffers a financial loss.
  • Some policies provide cover for the full tenancy period, while others are limited to a specific term.

For example, some products may cover up to 100% of rent arrears for up to three years, subject to their terms and conditions.

 

Are There Any Requirements for Third Party Guarantors?

Third-party guarantor services commonly require:

  • The property to be located in England.
  • A satisfactory referencing result.
  • The tenancy to meet the provider's eligibility criteria.
  • All tenants named on a joint tenancy agreement to complete any required documentation.

 

What Are The Key Points I Should Know About Third-Party Guarantors?

  • Fees are non-refundable in most circumstances.
  • The guarantor agreement is usually linked to a specific property and tenancy.
  • If tenants change during the tenancy (for example, a housemate moves out and is replaced), a new guarantor arrangement may be required.
  • Some providers require all tenants in a shared property to participate in the scheme, even if some have personal guarantors.
  • Third-party guarantors do not remove a tenant's responsibility for paying rent. If the guarantor company pays the landlord, they will normally seek to recover those costs from the tenant.

 

What Should I Know Before Signing Up?

You should:

  • Compare different guarantor providers and their fees.
  • Check exactly what is covered and for how long.
  • Read the terms carefully, especially regarding joint tenancies, tenant replacements, and cancellations.
  • Confirm that the landlord or letting agent is willing to accept the proposed guarantor company before paying any fees.

 

Who are The Most Common Third-Party Guarantors?

UK Guarantor- Trustpilot Rating: 4.8

Rent Guarantor- Trustpilot Rating: 4.6

Housing Hand- Trustpilot Rating: 3.2

 

This is not an exhaustive list of third-party guarantor providers. The services listed are among the most commonly used, but their inclusion does not imply endorsement or recommendation. We encourage you to research and compare alternative providers to find the option that best suits your circumstances.

 

A third-party guarantor can be a useful option for students who do not have a suitable UK-based guarantor, but it is important to understand the costs, eligibility requirements, and limitations of the service before committing.