Demand for rental guarantor services at all time high

Demand for guarantor services has reached an 'all time high', with an increasingly diverse audience needing access to these services as landlords and referencing agencies expand their acceptance criteria for eligible guarantors, according to new research from Housing Hand.

Related topics:  Finance
Rozi Jones
30th May 2022
student let halls of residence
"UCAS’s focus on estranged students in its application process means that there will be more students identifying as estranged."

The guarantor service says this is particularly notable in areas where high quality university places are in demand and thus so is local accommodation.

For students who don’t have family to fall back on, the situation is significantly harder. UCAS has recognised this, making the option for students to identify themselves as estranged more prominent in its application process. There is also growing awareness of the need to provide additional support for care leavers, with many local regions focusing on this. In Cambridge, for example, the Cambridge University Science and Policy Exchange programme recently recommended to Cambridgeshire County Council that care leavers be given support equivalent to that offered by a parent, to ‘equalise the playing field.’

One way to do this is to provide a rent guarantor. With a rent guarantor in place, students can pay their rent monthly instead of needing to stump up an upfront sum.

According to children’s charity St Christopher’s Fellowship, just 6% of care leavers go to university. That compares to 37.9% of the entire UK 18-year-old population, according to UCAS. Many factors come into play to cause this, including access to accommodation and funding, as well as mental health concerns. St Christopher’s reports that 46% of care leavers have some form of mental health issue (that compares to just 10% of their peer group).

Housing Hand has been partnering with universities since 2017 but has seen a significant increase in demand in recent months, with several high-profile universities entering into partnerships with the company to better support vulnerable students, including those who are estranged from their family and those leaving care.

James Maguire, head of sales and business development at Housing Hand, said: “Distance learning and lack of face-to-face interaction have been a challenge over the last few years in terms of student engagement. While this situation is improving, what we’re now seeing is that many landlords are becoming scrupulous about who they rent to and putting conditions in place. From talking to students at multiple housing fairs, we’ve noted that it’s increasingly common for landlords to ask for six- or 12-months’ worth of rent to secure a property. This is resulting in a narrowing of property choices for students.

“Higher education institutions are increasingly embracing the need to provide comprehensive services for all students, including those who have previously slipped through the cracks. UCAS’s focus on estranged students in its application process means that there will be more students identifying as estranged. This is pushing many universities to not just offer rental guarantor services to their entire student body, but to put additional support in place for the most vulnerable, including care leavers and estranged students.”

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