UK rental guarantor service Housing Hand has reported a huge spike in demand for its rental guarantor services, as 2023 proves to be a bumpy year for the country’s private landlords and tenants. Housing Hand has seen applications for rental guarantees rising by 50% over the past six months, while the company is also signing up accommodation partners at a rate of 200 per quarter. Such stratospheric growth is usually associated with smaller start-ups, but Housing Hand is the market leader for rental guarantor services and has been operating in the UK and Ireland for over a decade.
Rising rents, along with the generally tougher economic climate, mean that more people need rent guarantors to secure the accommodation they want. However, the situation also means that more people are failing the checks required to serve as a guarantor. Housing Hand reports that the rate of those passing the relevant checks has dropped to somewhere around the 25% mark. This is leading to an increase in referencing firms seeking out additional assurance, resulting in even higher demand for rental guarantor services.
“Many people associate needing a guarantor with students, who have little or no credit history, but that’s certainly not the case these days. Many working professionals now have to provide a guarantor to secure their tenancies and many of them are turning to professional guarantor services to facilitate this. The result has been a rapid increase in applications for guarantors.
“The rental sector’s unfortunate storm needs solutions, which we are embracing in collaboration with our ever-expanding partner network. Tenants also need a speedy service, so we have enhanced our tech to be able to scale with demand.”
Graham Hayward, Chief Operating Officer, Housing Hand
Interest rate increases and the ongoing exodus of landlords from the private rented sector are driving up rents across the UK. Rents have already risen steeply in many areas. Home reports that rents across the UK have risen by 11.4% in the past year, while Foxtons reports a rise of 13% year-on-year in London (led by East London, which has seen an 18% increase in rents since May 2022).
For many landlords, rising interest rates have proven to be the final straw, following years of erosion of the profitability of providing homes for private tenants. Zoopla reports that 11% of the homes for sale on its site are former rental properties, as the mass exit from the private rented sector continues. In the majority of regions, Zoopla’s data shows that the number of homes for rent is somewhere between 20% and 40% below pre-pandemic levels.
