Collecting rent from tenants and covering monthly outgoings are understandably the biggest concerns for a landlord.
Two popular options are a rent guarantor or rental guarantee insurance; both of which can be implemented at the start of a tenancy agreement to support both tenants and landlords by underwriting any financial losses incurred if a tenant defaults on their rent.
But many people confuse the terms ‘rent guarantor’ and ‘rental guarantee insurance’. Despite being used interchangeably, they have entirely different meanings.
Below is a helpful comparison of the two, so you can decide which best suits your circumstances.
What is rental guarantee insurance?
Rent insurance is not a guarantor, it is an insurance policy for landlords. Rental guarantee insurance will ensure that a landlord gets paid when the tenant defaults. However, similarly to other insurance policies, tenants will have to meet certain conditions, have passed reference checks and provide a deposit, and if anything is missed, there is a risk that the insurer won’t pay. It is, however, quite common for landlords to still request a guarantor even if they have rent insurance.
What is a rent guarantor?
A rent guarantor is someone (usually a parent, guardian or third-party service) who agrees to take responsibility for the rent if there are any issues with payments. A guarantor will cover any rent arrears that the tenant doesn’t pay, which includes any damages amounting to more than the deposit.
Know the difference:
Due to a variety of circumstances, often, prospective tenants, both students and professionals, find themselves in a position of not being able to secure a guardian as a rent guarantor. This is where our services are here to help, however, it is important to understand the differences between a rent guarantor service like Housing Hand, and rental guarantee insurance:
Rent guarantor service:
- Speeds up the process by removing the need for tenants to pay rent up front
- Guarantees their rent for the whole of the tenancy
- Affordable fees are taken directly from the tenant and spread across the months, with no cost to our partners
- Co-signer required – What is a co-signer?
- Housing Hand guarantees to pay out on all valid claims within 28 – 35 working days of receiving the relevant evidence and invoice
Services like Housing Hand can also take over the entire default process up to eviction, whereas other models still require the accommodation provider to chase up defaults. This is just another layer of support and reassurance for providers.
Rental guarantee insurance:
- An insurance policy as opposed to a guarantor
- Can be a cheaper option, but often has a lesser payout rate, more T&C’s and a much higher risk when dealing with the technicalities of an insurance policy
- Can also work with a tenant guarantor for additional protection
- Paid for by the landlord
Partnering with a rent guarantor service
Rather than turning away reliable applicants, especially international students or young working professionals, a partnership with a trusted guarantor service like Housing Hand offers a smarter and more secure solution for landlords and accommodation providers.
Why work with Housing Hand?
100% payout on all valid claims
Our partners benefit from complete peace of mind. Since 2013, Housing Hand has a proud record of paying out on 100% of all valid claims, even during challenging social and economic periods, such as Covid & Brexit. If a tenant defaults, Housing Hand covers the rent as agreed, which removes any financial risk to you.
Access to a wider tenant pool
Partnering with us allows you to confidently accept students and international tenants who may not have a UK guarantor, which helps you fill properties faster and reduce void periods.
Working together with our partners
With Housing Hands digital onboarding, we allow our partners to set up co-branded journeys and can also integrate into your booking journey if needed, with our webhook and deep URL technology. We also offer exclusive discounts to your tenants, making it easier for them to sign up, speeding up the process and getting your rooms filled faster.
No extra admin
We handle all the paperwork, communication, and support, providing you with verified guarantor deeds and a dedicated relationship team. With the Housing Hand guarantor service, no referencing is needed, as long as the tenant meets the qualifying criteria.
Trusted by thousands of agents, landlords, and universities
Housing Hand is the UK’s leading guarantor provider, working with accommodation partners nationwide to improve occupancy and protect rental income.
Supporting the wellbeing of your tenants
We offer a 24/7 GP and wellbeing service to your tenants, which can potentially reduce the number of defaults due to physical or mental ill-health.
To find out more, book an appointment with our partnerships team.
