What the Renters’ Rights Act Means for Tenants: Why Guarantor Schemes Matter More Than Ever
The Renters’ Rights Act is introducing some of the most significant changes to the private rental sector in years. While the reforms aim to create a fairer and more secure system for tenants, they also bring important practical changes—particularly around how affordability is assessed.
One of the most impactful changes is the restriction on rent in advance. Because of this shift, guarantor schemes are set to become an increasingly important and beneficial solution for tenants.
Guarantor Schemes: A Growing Opportunity for Tenants
As the rental market evolves, guarantor schemes are quickly becoming one of the most effective ways for tenants to strengthen their applications. Unlike relying on large upfront payments, guarantor schemes provide:
- Greater accessibility for tenants without traditional income structures
- Flexibility for those new to the UK or without a credit history
- A clear, structured solution that landlords recognise and trust
Professional guarantor services—such as those we work with; Housing Hand and Goodlord Guarantor—essentially act as a financial safety net for landlords. This gives tenants a credible and widely accepted alternative to traditional referencing criteria.
The End of Rent in Advance
From May 1st 2026, landlords and letting agents will no longer be able to request or accept rent in advance as a way of mitigating affordability concerns.
Historically, paying several months’ rent upfront has been used by tenants to demonstrate financial reliability—particularly when they didn’t meet standard referencing criteria. While removing this requirement may reduce large upfront costs, it also removes a key workaround that many renters have relied on. This is where guarantor schemes step in as a practical and increasingly essential alternative.
Who Will Be Affected?
The removal of rent in advance will particularly impact tenants who don’t fit neatly into traditional referencing models, including:
- Self-employed individuals with fluctuating income
- International tenants without UK credit history
- Students or those relocating without secured employment
- Tenants without access to a personal guarantor
In the past, these groups could offer rent upfront to secure a tenancy. Going forward, guarantor schemes will often be the most viable way to bridge that gap.
What Does This Mean in Practice?
Without the option of rent in advance, affordability assessments are likely to become more standardised and, in some cases, stricter.
This could lead to:
- Increased reliance on guarantors or guarantor schemes
- Greater scrutiny of income and credit history
- Fewer flexible arrangements
- More competition for available properties
However, rather than being a barrier, this shift creates an opportunity: guarantor schemes provide a consistent, recognised solution that works for both tenants and landlords.
A Note for Landlords
Without rent in advance, applicants who are financially capable—but don’t meet strict referencing criteria—may initially appear higher risk. Guarantor schemes offer a reliable and structured alternative to manage that risk
Services like Housing Hand and Goodlord step in as the guarantor, covering rent in the event of arrears. Many are underwritten and can provide coverage for the full duration of a tenancy, often with a one-off fee paid by the tenant.
For landlords, this means:
- Increased confidence when accepting a wider range of applicants
- Reduced financial risk
- Access to a broader and more diverse tenant pool
How Can Tenants Prepare?
With these changes approaching, preparation is key. Here are some practical steps:
- Explore guarantor schemes early: Securing a professional guarantor can significantly strengthen your application
- Organise your financial records: Especially important for self-employed applicants
- Understand your options: Whether through a personal guarantor or a professional service
- Being proactive—particularly in arranging a guarantor solution—can make all the difference in a more structured rental market.
Final Thoughts
In this new landscape, guarantor schemes are not just an alternative—they are becoming a key part of how tenants successfully secure homes.
If you’re self-employed, new to the UK, or have a non-traditional income, now is the time to explore your options. Planning ahead—particularly by arranging a guarantor—will put you in the strongest possible position.
If you have any questions about how these changes may affect you, whether as a tenant or landlord, our team is here to help—please feel free to give our team a call today on 01273 253 000.