The Covid-19 pandemic has had an adverse effect on the rental market across the UK. Due to extensive job losses, businesses closing down and increased redundancies, landlords and tenants across the UK have understandably struggled with financial stability and making their usual rent payments. Despite all of this financial uncertainty, Housing Hand still recorded a surprise increase of 8% in the number of international working professionals that it guaranteed between 2019 and 2020. UK Guarantor services are helping to keep the momentum in the private rental sector by giving landlords and letting agents the security needed to proceed with letting a property to a prospective tenant, that may be struggling to provide evidence of stable income due to the economic uncertainty.
How has the Pandemic affected the rental market?
The National Residential Landlords Association (NRLA) has reported that the crisis could cost up to a total of £473m in private sector rent arrears, with statistics from the Resolution Foundation stating that 750,000 households had fallen behind on rent payments in January 2021. Landlords tend to work constructively with their tenants where they have struggled to make payments, however, this is not sustainable, and the uncertainty causes both parties unwanted stress.
Tenants and UK guarantors have been the most impacted by the pandemic. It has made it harder for renters to secure a new property, typically when they have to pass reference checks and prove income. Despite this, letting agents still require a 100% guarantee of a tenants rent. This is why we will continue to see a high demand for UK guarantor services, post-pandemic.
How are parents and students impacted?
Due to the economic uncertainty, students and renters are facing personal financial instability, and so are their parents. This is why many students and parents/guardians in the UK are relying on the security of guarantor services – as opposed to the financial risks associated with being a parental guarantor. Where students are concerned, the pandemic has caused many financial difficulties for both parents and guardians. It is more likely that due to being on furlough or unemployed, they are unable to support in guaranteeing financial stability, and need the reassurance of UK guarantor services like Housing hand.
How are working professionals being impacted?
It is not only the student side of the private renting sector that we have seen a shift in. Working professionals who usually would have easily been able to rent prior to the pandemic, are now in a position where they are turning to family and friends to be their guarantor. Due to the excessive amount of unemployment stated above, it is increasingly difficult to secure this. Working professionals who have also gone on to find work, continue to be shaken and affected by the unpredictability of their employment status and also still need that added reassurance, which in turn is causing a rise in demand for UK guarantor services.
Summary: Here’s why there will there still be a high demand for UK Guarantors post-pandemic:
- The pandemic has caused mass redundancies, unemployment and financial uncertainty across the UK
- Current tenants seeking new accommodation are unable to secure a rental property due to not being able to provide evidence of stable income
- Where students would usually rely on parents/guardians to be a UK guarantor, they too have been affected by the crisis
- Working Professionals who are usually able to pay rent with a stable income, are now turning to friends, family and UK Guarantor services like housing hand for support
- Letting agents and landlords still require a 100% guarantee on a tenants rent, and services like Housing Hand are able to pay 100% of all valid claims
- From a landlord’s perspective, the increased financial risk that is now associated with parental UK guarantors is mitigated by UK rental guarantor services If you are a current tenant, student or working professional looking to rent in the UK and have been impacted by the financial repercussions of the pandemic, Housing Hand could be the perfect service for you. If you are unable to provide a UK guarantor to secure your new home due to these uncertain times, we are here to support and give a 100% guarantee on your rent. If you are unsure about how a UK guarantor service works, you can find out more in our knowledge base here. Otherwise, get in contact with a member of our team today to begin the easy process of securing your dream accommodation.
