Looming Ban on ‘Rent in Advance’ Driving Huge Rise in Guarantor Demand – What Landlords Must Know
In 2025, a dramatic shift in the UK rental market is unfolding, and landlords across the country are starting to feel its effects.
The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, and this change is rapidly altering how tenancies are secured, how risks are managed, and how landlords vet prospective tenants.
Traditionally, ‘rent in advance’ has been a tool used by landlords to mitigate risk, particularly with tenants who may have poor credit history, low income, or limited references.
However, legislative reform under the Renters’ Rights Bill and wider housing regulation changes are now pushing to outlaw or restrict the use of multiple months’ rent upfront, particularly for vulnerable tenants.
As a result, the looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, with landlords scrambling to protect themselves from financial exposure in other ways.
In this article, we will examine the reasons behind this legislative change, its implications for landlords and letting agents, and how the growing reliance on guarantors may reshape the private rental sector.
What Is ‘Rent in Advance’ and Why Is It Used?
‘Rent in advance’ refers to the practice of asking tenants to pay several months’ rent upfront at the start of a tenancy—often three, six, or even twelve months. It is a common alternative to relying on conventional referencing, especially where a tenant:
- Is self-employed or has fluctuating income.
- He is a student with no income history.
- Has poor or no credit history.
- It is new to the UK and lacks a UK guarantor.
- Has previously defaulted on rent or broken tenancy terms.
For landlords, this payment strategy provided an extra buffer and reassurance. However, critics argue that it creates financial barriers that discriminate against low-income tenants, benefit recipients, and younger renters without parental economic support.
That’s why the looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand—because landlords still need a fallback, especially in a market facing rising arrears and complex tenant risk profiles.
Why Is the Government Banning Rent in Advance?
The Renters’ Rights Bill and the broader movement towards tenant fairness and protection in the UK provide the legislative backdrop for this change. Campaigners have long argued that asking for rent in advance is unfair, exclusionary, and exploits the housing shortage.
The main reasons behind the looming ban on ‘rent in advance’ include:
- Equality of Access: Rent-in-advanced policies disproportionately block access to housing for low-income tenants.
- Discrimination Risks: It has been alleged that landlords use rent in advance to indirectly screen out certain groups, including benefit claimants and foreign nationals.
- Legal Ambiguity: It’s often unclear whether rent in advance constitutes a deposit, especially when large sums are held. This complicates legal compliance with deposit protection schemes.
As this ban edges closer to becoming law, landlords are rapidly shifting strategies. The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, as it represents one of the few remaining viable safeguards.
Guarantors: The New Gold Standard for Risk Protection?
A guarantor is someone, typically a financially stable family member or close associate, who agrees to cover the tenant’s rent or damages if the tenant fails to pay. With the impending restriction on rent in advance, this model is seeing a dramatic resurgence.
In the absence of upfront funds, landlords are now asking tenants to secure a guarantor before any tenancy is approved. This is particularly common in:
- Student accommodation
- Houses of multiple occupation (HMOs)
- Low-income areas with high arrears risk
- Urban centres where tenant turnover is high
Letting agents also report a growing preference among landlords for corporate or professional guarantor services. These companies charge tenants a fee and act as their guarantors in exchange for assessed risk.
The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand not only among private landlords but also among institutional build-to-rent providers, who are already adapting their application processes.
Consequences of the Shift to Guarantors
This change has significant ripple effects on both landlords and tenants:
For Landlords:
- More Due Diligence: Guarantors must be fully vetted, adding time and complexity to the rental process.
- Reduced Upfront Cash Flow: Without rent in advance, landlords may face more exposure if tenants default and no guarantor is secured.
- Legal Liability: If guarantor agreements are not correctly written, landlords may struggle to enforce them.
For Tenants:
- Higher Entry Barrier: Tenants without access to a suitable guarantor may face even greater difficulty in securing a rental.
- Family Pressure: Young adults may rely on parents or relatives, increasing intergenerational financial pressure.
- Reliance on Paid Guarantor Services: Some tenants may be required to pay private firms hundreds of pounds to act as guarantors, adding to the cost of their move-in process.
Ironically, while the policy was designed to reduce discrimination, the looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand that may shift the same access problem elsewhere.
Risk to Landlords Without Guarantors
One of the most significant concerns facing landlords is that removing the rent-in-advance option could expose them to greater financial risk. The ability to recover unpaid rent becomes harder if there is no financial buffer and no guarantor.
Landlords who continue to operate without securing either a rent guarantee insurance policy or a solid guarantor agreement may find:
- Rent arrears increase with no recourse.
- Legal action is the only fallback, but this is slow and costly.
- Tenant screening becomes more restrictive by necessity.
With rising arrears and evictions becoming increasingly complex under the Renters Reform Bill, many landlords now see the guarantor route as essential rather than optional.
The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, and those who ignore this reality may be caught off guard by growing compliance and cash flow issues.
What Should Landlords Do to Prepare?
With the rental landscape shifting so quickly, landlords should act now to protect their interests:
- Update Application Procedures: Require guarantors by default if rent in advance is no longer viable.
- Use Legally Sound Guarantor Agreements: Ensure guarantor forms meet current legal standards and are enforceable in court.
- Consider Rent Guarantee Insurance: For tenants without a guarantor, rent guarantee policies can fill the gap, although they come at a cost.
- Train Letting Agents: Ensure any agent representing your property is aware of these changes and doesn’t unlawfully request rent in advance.
- Audit Current Tenancies: If you’re holding rent in advance, ensure the terms are documented, and you’re not breaching deposit laws.
The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, and proactive preparation is the only way to stay ahead of the curve.
Will Paid Guarantor Companies Become the Norm?
As more tenants struggle to meet landlord requirements, the market for paid guarantor services is booming. Companies such as Housing Hand and RentGuarantor now offer services that allow tenants to pay a fee in exchange for a professional guarantee.
This presents another shift in the rental model—one that monetises access to housing even further. Critics argue that this merely replaces one financial gatekeeping method (rent in advance) with another (paid guarantees).
Nonetheless, for landlords, these services offer peace of mind, especially if the tenant is otherwise suitable but lacks a personal guarantor. Again, the looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand, and these paid options are quickly filling that gap.
Could the Guarantor System Become Regulated?
With a growing reliance on guarantors, questions are also being raised about regulatory oversight. For example:
- Should there be a minimum income threshold for guarantors?
- How should disputes between tenants, guarantors, and landlords be handled?
- Are paid guarantor services exploitative or necessary?
As the use of guarantors becomes more widespread, future legislation may address transparency, fairness, and enforceability within these arrangements.
Conclusion
The UK rental market is undergoing fundamental changes. The looming ban on ‘rent in advance’ is driving a massive rise in guarantor demand—and landlords must now navigate a landscape where access to trusted guarantors is as vital as the tenants themselves.
While the policy intention may be to promote equality and reduce financial discrimination, in practice, it is simply shifting the responsibility of security from the tenant to the guarantor.
Whether that guarantor is a family member or a paid company, landlords will increasingly rely on this method to reduce financial exposure and maintain rent flows.
To stay compliant and competitive in 2025 and beyond, landlords must adapt now.
Frequently Asked Questions (FAQs)
Is it illegal to ask for rent in advance in 2025?
No, but the government is introducing tighter restrictions. Under the Renters’ Rights Bill, large upfront rent payments may be deemed unfair or discriminatory, and enforcement is expected to tighten.
The looming ban on ‘rent in advance’ is driving a significant rise in guarantor demand, as landlords are pre-emptively adapting.
Can I still accept six months of rent upfront from a tenant who offers it?
This may still be legal, but the risks are high. If the tenant is pressured or does not fully understand the terms, it could be interpreted as a breach of consumer protection laws. Guarantors are seen as a safer alternative.
What qualifies someone to be a guarantor?
A guarantor should have a strong credit score, stable income, and ideally be a UK homeowner. They must also be willing to sign a legal agreement and accept financial responsibility if the tenant defaults.
Are paid guarantor services reliable?
Many professional guarantor firms are regulated and offer robust support; however, landlords should carefully read the fine print. Ensure the guarantee covers both rent and damages and confirm enforceability.
Can I require both a guarantor and rent to be paid in advance?
This dual requirement may soon be outlawed, as it is perceived as excessive and discriminatory. The best practice is to choose one or the other—most landlords are now moving toward the guarantor route.
What happens if the guarantor refuses to pay?
If the agreement is legally sound, you can take the guarantor to court to recover losses. However, enforcement can be slow and depends on the guarantor’s financial status.
Should I adjust my tenant screening process?
Yes. With the looming ban on ‘rent in advance’ driving a massive rise in guarantor demand, your screening should now include checks on both tenants and their guarantors. This ensures both can meet financial obligations.
How can I protect myself as a landlord in this new environment?
Adopt clear legal agreements, consider rent insurance, and stay informed about policy updates. Always document communication and use professional letting agents where possible.
If you are a landlord in 2025, it’s essential to recognise that the looming ban on ‘rent in advance‘ is driving a massive rise in guarantor demand, and your response to this trend may define your success or struggle in the years ahead.
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