Government tells landlords to review existing guarantor agreements

Summary: The government is advising landlords to review guarantor agreements established before the Renters’ Rights Act came into effect on 1 May 2026, as the Act may impact their terms. This follows a rise in demand for guarantors due to restrictions on upfront rent payments introduced by the legislation.

Government urges landlords to review existing guarantor agreements

The government has updated its guidance on fees landlords can charge as part of a tenancy, highlighting the need for landlords to review any guarantor agreements made before the Renters’ Rights Act came into force on 1 May 2026. The Act has introduced tenancy reforms that may affect the terms of these agreements.

The guidance states that landlords may require tenants to provide a suitable rent guarantor as a condition of granting a tenancy, including the option for tenants to use professional guarantor services. However, landlords with agreements predating 1 May 2026 should review these contracts and seek the guarantor’s consent to any necessary variations.

Landlords and letting agents are advised to obtain independent legal advice if they are uncertain whether their guarantor agreements are impacted by the new legislation.

Challenges for tenants in securing guarantors

The Renters’ Rights Act prohibits landlords and agents from accepting large sums of rent in advance, which has increased the demand for guarantors. However, not all tenants have access to suitable guarantors, and the referencing and verification process can cause delays in a fast-moving rental market.

Sam Reynolds, chief executive of Zero Deposit, noted that the traditional guarantor model is becoming less practical for many renters. According to the English Housing Survey, 21.5% of private renters previously paid more than one month’s rent upfront, an option now restricted.

Zero Deposit suggests landlords may respond by raising the affordability threshold from 2.5 times to three times the tenant’s income to mitigate risks in the absence of large upfront payments.

Practical support for landlords through TLA membership and ORBIT™

With the changes introduced by the Renters’ Rights Act affecting guarantor agreements and tenancy conditions, landlords need to ensure their documentation and compliance practices are up to date. TLA membership offers access to practical guidance, compliance resources, and document support tailored to evolving private rented sector regulations.

TLA is currently BETA testing ORBIT™, a new property management and compliance platform designed to help landlords organise property records, tenancy documents, and compliance activity in one place. This can assist landlords in reviewing and managing guarantor agreements and other tenancy documentation effectively.

Members can explore TLA’s compliance resources and tools to stay informed and better prepared for regulatory changes affecting their rental portfolios.