Renters' Rights Act May Force Thousands of Tenants to Find Guarantors
The Renters' Rights Act has been positioned as one of the most significant reforms to England's private rental sector in decades. Designed to offer greater security and fairness to tenants, the legislation has been widely welcomed by housing campaigners and tenant advocacy groups. However, new research suggests it may also come with an unintended consequence — a sharp rise in the number of renters required to provide a guarantor before securing a tenancy.
According to analysis conducted by Zero Deposit, nearly half of England's local authority areas could reach a tipping point where standard affordability thresholds can no longer be met by average earners. The research reveals that average earnings currently fall £1,281 short of what is typically required to pass rental affordability checks at current market rental levels. This gap could push landlords and letting agents toward routinely demanding guarantors as a way of protecting themselves from financial risk in a changing legal landscape.
Understanding the Affordability Gap Behind the Guarantor Problem
To understand why the Renters' Rights Act may drive up guarantor requirements, it is important to first understand how rental affordability is typically calculated. Most landlords and letting agents apply a rule of thumb that a tenant's annual income should be at least 30 times the monthly rent — sometimes expressed as a requirement that rent does not exceed 30 to 33 percent of gross monthly income. In many parts of England, rising rents have already pushed this calculation to its limits for average earners.
Zero Deposit's analysis found that the average shortfall of £1,281 per year between actual earnings and the income needed to meet affordability criteria is not evenly distributed. In high-demand urban areas, the gap is considerably wider. In contrast, some more affordable regions still sit within the threshold, though the margin is narrowing year on year as rents continue to climb.
When tenants fail affordability checks, landlords have historically had two main options: refuse the applicant or accept them with a guarantor in place. A guarantor — typically a homeowning parent or close family member — agrees to cover unpaid rent or damages if the tenant defaults. With the Renters' Rights Act reducing landlords' ability to evict tenants quickly under the old Section 21 "no-fault" eviction process, the financial stakes of taking on an unsuitable tenant are perceived as higher than ever.
How the Renters' Rights Act Changes the Risk Calculation for Landlords
The abolition of Section 21 evictions is central to the Renters' Rights Act. Under the previous framework, landlords could evict tenants without providing a specific reason, offering a relatively swift route to regaining possession of a property. The new legislation removes this option, meaning landlords must now rely on strengthened Section 8 grounds — such as rent arrears or anti-social behaviour — to recover their properties.
While the government has pledged to reform the court system to make Section 8 proceedings faster and more efficient, many landlords remain concerned about the time and cost involved in pursuing possession through the courts. In this environment, risk mitigation becomes a priority. Demanding a guarantor is one of the most straightforward tools available to landlords who want additional financial security when a tenant's income does not comfortably exceed affordability thresholds.
This shift in risk calculation could have a disproportionate impact on certain groups of renters, including younger tenants, those in lower-paid employment, people with irregular income such as freelancers and gig economy workers, and those moving to a new city without an established rental history. For these groups, finding a suitable guarantor — particularly one who is a UK homeowner — can be a significant barrier to accessing the private rented sector.
Which Areas of England Are Most at Risk?
The Zero Deposit research highlights that the affordability problem is not confined to London and the South East, though these regions remain the most acutely affected. Across nearly half of England's local authority areas, the combination of local rental prices and median earnings means that a substantial proportion of prospective tenants would not meet standard affordability criteria without supplementary measures such as a guarantor.
Areas where rental growth has outpaced wage growth in recent years are particularly vulnerable. Cities including Manchester, Bristol, Leeds, and Birmingham have seen significant rent increases driven by housing demand, population growth, and constrained supply. Even in traditionally more affordable locations in the Midlands and the North, the gap between earnings and rental requirements is beginning to emerge as a policy concern.
The Broader Impact on the Rental Market
A widespread increase in guarantor requirements would have consequences beyond individual tenants. It could effectively create a two-tier rental market in which those with access to financially stable family members are able to rent freely, while those without such support face significant barriers. This has implications for social mobility, equality of opportunity, and the government's broader housing objectives.
There are also practical questions about what happens when the guarantor model breaks down. Not everyone has a parent or relative who owns a home or has sufficient income to act as a guarantor. Institutional or commercial guarantor schemes and deposit replacement products like those offered by Zero Deposit exist partly to address this gap, but awareness and uptake remain inconsistent across the market.
What Tenants and Landlords Should Do Now
For tenants who are concerned about meeting affordability criteria under the new rules, there are several practical steps worth considering:
- Review your income-to-rent ratio before applying for properties to understand whether you are likely to pass standard affordability checks.
- Explore deposit replacement and guarantor scheme products that can support your application if a personal guarantor is not available.
- Be transparent with prospective landlords or letting agents about your financial situation and explore whether additional references or a larger upfront payment could substitute for a guarantor.
- Seek independent advice from a housing charity or Citizens Advice if you are struggling to find accommodation due to guarantor requirements.
For landlords and letting agents, it is worth investing time in understanding the full suite of risk mitigation tools now available in the market. Blanket guarantor requirements may exclude otherwise creditworthy tenants and reduce the pool of suitable applicants, particularly in competitive rental markets. A nuanced approach that takes into account the full financial picture of a prospective tenant — including savings, employment stability, and rental history — is likely to serve both parties better in the long run.
Conclusion: A Reform With Far-Reaching Consequences
The Renters' Rights Act represents a genuine attempt to rebalance the relationship between landlords and tenants in England's private rented sector. However, as the Zero Deposit research makes clear, reform does not occur in a vacuum. The removal of Section 21 and the broader shift in risk toward landlords is already influencing how the market operates — and the potential increase in guarantor requirements is one of the clearest early signals of this dynamic. Policymakers, housing organisations, and market participants will need to monitor these trends closely to ensure that the act's protections reach the tenants who need them most, rather than creating new barriers to access.