Some 20% of prospective tenants could not rent a property without a guarantor, according to proptech firm Goodlord.
In the majority of cases, requiring a guarantor is due to the prospective tenant failing an affordability test. Although there is no industry standard for affordability, Goodlord defines this as prospective tenant’s yearly rent share being below 40% of their yearly earnings. In nearly all instances a guarantor is provided by family or friends.
The situation for young renters is even worse with people aged between 20 and 30 twice as likely to require a guarantor than someone over 30. In a small bright spot, the overall proportion of people requiring guarantors has remained steady compared to 2017.
Goodlord’s research also revealed that the average person in the UK spends 32% of their income on rent, a slight improvement on last year’s figure of 32.5%. Londoners pay the highest proportion of their income on rent at 35%, while people in the Midlands spend the lowest proportion at 27%.
Tom Mundy, COO and co-founder of Goodlord, said: “Renting is already a stressful enough process for everyone involved, without the added complication of a guarantor, which slows down the application process for letting agents, landlords and tenants.
“Technology could help to speed up this process and, in the future, it might even provide new ways of assessing people’s suitability for renting.”