The UK government is warning landlords to review guarantor agreements made before the Renters' Rights Act came into effect on May 1, 2026, as these contracts may not comply with new tenancy reforms. The updated guidance highlights potential implications for agreements put in place prior to the introduction of the legislation.
As demand for guarantors has surged since the Act's implementation, landlords are being urged to assess their existing agreements, obtain consent from guarantors for any necessary changes, and seek independent legal advice if there's ambiguity regarding an agreement's compliance with the new regulations. The government's guidance explicitly states that agreements made before 1 May 2026 may be affected by the tenancy reforms.
The Renters' Rights Act has significantly impacted the way landlords operate, particularly in regards to accepting large amounts of rent in advance. With this option largely curtailed, many tenants are now more reliant on securing a suitable guarantor. According to the English Housing Survey, 21.5% of private renters previously took advantage of paying multiple months' rent upfront.
Industry experts have warned that the traditional guarantor model is facing significant challenges. Sam Reynolds, chief executive of Zero Deposit, noted that not every tenant has access to a suitable guarantor, and even when one is available, the referencing and verification processes can cause substantial delays in a fast-paced rental market where properties are often secured quickly.
As landlords adapt to the changing landscape, some anticipate adjusting affordability thresholds as an alternative form of financial protection. This could involve increasing the required income multiple for tenants from 2.5 times income to three times income, potentially mitigating perceived risks in the absence of large advance payments.