Most students looking for accommodation in the private rented sector will require a guarantor. A guarantor is someone who will take on the responsibilities of your contract if you cannot do so. For example, if you cannot pay rent your landlord will contact your guarantor and they will be required to pay for you. Students will usually have a parent or relative sign as their guarantor, but this may not be an option for everyone. The system often penalises disadvantaged students. It is, unfortunately, the only viable system that currently exists. For those students that cannot get a guarantor, we have some other options!
Alternatives
Univeristy Guarantor Scheme
Some universities such as UCL or the University of Sheffield offer guarantor schemes. Under these schemes, the university offers to act as your guarantor. Normally, they will come with certain requirements such as demonstrating that you have the proper funds in place to cover your rent.
If your university does pay out, you are often required to pay it back within a limited time period. For example, at the University of Sheffield, you are required to pay the university back within three months of any payout.
Certain universities, such as the University of York, also require you to "have good academic standing". It is unclear what counts as good academic standing. If it is based purely on grades then some may argue this is unfair. Students from low socioeconomic backgrounds are more likely to display learning-related behaviour problems and, through no fault of their own, may not achieve "good academic standing". However, these are often the same students who cannot find a guarantor.
University guarantor schemes are the best option for many students as they rarely have any up-front costs and therefore do not unfairly penalise disadvantaged students.
Guarantor Free or Advanced Payment
Some properties do not require a guarantor; however, these are rare and often require an employment history. Many students do not have enough experience and cannot provide sufficient background. One option is to negotiate advanced payments of your rent with a landlord. However, landlords may expect several months of rent in advance. It could be thousands of pounds, a sum beyond the reach of most students.
Guarantor Companies
You could look at a guarantor company like UK Guarantor or Housing Hand. They operate as a guarantor for you at a fee. You are required to go through a vetting process. The problem with these companies is the fees. UK Guarantor charges a minimum of £249, which may increase depending on your rent. Housing Hand charge a minimum of £42 a month for eight months (£336). For most students, this is not a small sum of money, but it could be a useful alternative if you cannot get a guarantor.
Rent Guarantee Insurance
Landlords can take out rent guarantee insurance to cover amounts their tenants cannot pay. You could offer to cover the cost of the insurance. The problem is most policies require tenants to have a written reference or a guarantor. A reference can be from an employer or previous landlord and a credit check. Insurance could be a cheaper option if you spend time researching different policies.
Periodic Tenancies
A final option is to offer to sign a periodic tenancy. Periodic tenancies can run week-by-week or month-by-month. They provide less certainty, so landlords will need an incentive to agree. You could persuade them by offering a slightly higher rent, for example, £10 more per month. You will need to lay out all the advantages for them and explain your intentions. Explain you intend to rent for a year and why you cannot find a guarantor. They will not worry about you falling into arrears as you pay a month's rent in advance and they have the security of asking you to vacate the property if you cannot pay in advance.
Things to Remember
If you cannot find a guarantor, talk to the landlord and explain why you cannot get one. You will get further if they understand your situation fully. Landlords do not just use guarantors for protection; they can be indicators of bad tenants. It can suggest that you are not trustworthy or reliable. In most cases for students, this is an incorrect assumption. If you do find a landlord who will make an exception remember to be on your best behaviour; they will be an invaluable reference for the future.
Our Solution
The Guarantor Trap is a problem that can seriously disadvantage some students. UCL had a scheme in place that allowed low-income students to use the university as their guarantor. However, the service will end this year (2020). COVID-19 has put universities under severe financial pressure; UCL felt it was no longer able to provide this service. Many argue that this is a mistake as it only disadvantages students from low-income backgrounds.
We believe there is a simple solution to this problem. Universities offer well-paid jobs to their students, for example, The University of York YuCall service. YuCall is a team of student fundraisers working 6-10 hours a week for £8.21 per hour (correct at time of writing). Often students who cannot find a guarantor are from low-income backgrounds and have to work to support themselves. Our suggestion is for universities to act as guarantors for students who need it and as part of the conditions require them to work for the university in a scheme like YuCall. Universities will have the safety of knowing the student is earning enough to pay for their accommodation. The student benefits from having a guarantor.
Unfortunately, this does put restrictions on the maximum rent a particular student can have. It does, however, provide a solution to a problem that will otherwise cost more.
The Guarantor Trap is a problem in our current model and needs a solution. If you agree with our concept, take it to your student union and ask them to look into it!
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