A rent guarantor service is trialling its product with a group of 25 letting agents in an effort to help tenants secure a property.
Housing Hand will pay a referral fee to agents who get tenants to sign up to its guarantor service.
Tenants can pay £42 over eight months or £295 for 12 months to have their rent guaranteed by the service, which it is believed should give agents and landlords a wider pool of renters.
Housing Hand already works with universities and local authorities.
The tenant remains liable to pay any rent covered by Housing Hand and they must also provide a co-signer who doesn’t live at the property who can also be pursued for payment.
This is not an insurance product so is not regulated but is covered by contract law, so any disputes would have to be resolved through the courts.
The initial trial with agents will run for 12 months. Letting agents refer applicants to Housing Hand for processing, then invoice the company in batches. The system allows agents to earn £25 each for the first batch of 15 tenants that use Housing Hand as the guarantor, £35 each for the next batch of 15 and £50 each for any further tenants.
Jeremy Robinson, group managing director of Housing Hand, said: “Housing Hand has already worked with more than 3,000 accommodation providers, helping and processing more than 70,000 applicants and covering £120,000,000 in rent.
“This has given us a deeper understanding of the issues that both tenants and letting agents face when it comes to guaranteeing rent and managing risk.
“While many companies are dressing up what are essentially just insurance products as ‘rent guarantee services’, we’ve worked to develop a completely different product – one that works more effectively for both parties.
“We look forward to analysing the results and expanding the trial in due course.”
Comments (8)
So does this scheme provide a good tenant? “in an effort to help tenants secure a property.” I want to secure a tenant for my landlord, who will behave, not clean up the mess after the horse has bolted, which is what they are offering. Has its use but far too many letting agents shove in a bad tenant because they have “cover” if it goes wrong. A bad tenant is a bad tenant, a good tenant doesn’t need these schemes. I do wonder at times if these schemes are not helping and making it easy for bad tenants to rent.
“A good tenant” is made up of many factors. However, it is the Letting Agent’s responsibility to validate the suitability of the tenant. With Housing Hand’s backing, accommodation providers can be assured that the tenant is 100% secure as they are backed by us, with over 6 years proven payouts.
I have just had to turn away a tenant who on the whole looked fairly decent but she has an historic voluntary arrangement for a debt. I approached the referencing company who said they would only accept her for insurance with a guarantor. She could not provide one and offered a rent guarantee insurance policy but that was not acceptable and I explained that only guarantees rent and does not cover any legal costs if there is a significant breach of the AST. It all sounds very encouraging but fact is it is very limited cover for a single risk in a world where Government, so called Housing Charities etc have raised the bar for everyone, including tenants.
Tenant’s can enquire if they have a historic voluntary arrangement for debt (IVA). The payment commitment for the IVA needs to be taken into account when looking at affordability.
My initial reaction is ‘why on earth would I want an unregulated private company (that could just shut down overnight) with millions in liabilities, guaranteeing anything?’. Surely a sufficient individual acting as guarantor that can be held personally liable would be much better, which funny enough is exactly what they ask for too! –
‘The tenant remains liable to pay any rent covered by Housing Hand and they must also provide a co-signer who doesn’t live at the property who can also be pursued for payment.’
So if the tenant CAN obtain a personal guarantor, what exactly is the point of this service?
As with any prudent company, Housing Hand has gull liability coverage. Otherwise, of course, you would be correct in that we could not trade.
Housing Hand does not sell insurance products so are not required to be regulated in the same way those selling just insurance are.
Over the last 6 years, we have worked with 3000+ landlords, letting agents, universities, embassies, local authority and other major purpose-built accommodation providers across the UK and Republic of Ireland. During this period we have an exemplary record of claim payouts.
Rent is not the only reason landlords seek a guarantor. When things go wrong the legals costs and regaining possession can be significant.
Totally agree. As a result Housing Hand also covers damages, dilapidations and eviction costs where required.