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Howsy Club: Zero deposits for tenants, greater protection for landlords

by Lewis JonesPosted on

Your rental property is a huge asset and making sure that it is properly protected is a big consideration for a savvy landlord.

Finding the right tenants, carrying out thorough checks, and feeling confident that you are handing over the keys to someone who will love the property as much as you do is vital when it comes to living a calm landlord life.

However, the rental cycle has looked the same for years. Landlord advertises a perfect property, tenant falls in love, passes all the checks, pays a hefty security deposit and moves in. We thought it was high time to shake up this outdated system, and have launched an innovative initiative designed to change the way letting looks, and smooth the way for more affordable, and accessible renting for everyone. We are proud to introduce Howsy Club.

How does Howsy Club Work?

It’s really simple. Despite the deposit cap of five weeks being introduced in June as part of the Tenant Fees Act 2019, the average rental deposit in the UK is still over £1,000. For tenants in the capital, this figure creeps closer to £2,000.

With Howsy Club, this upfront payment is replaced by a small monthly fee, paid in with the rent. This is great news for your tenant, who is free of the burden of finding a hefty sum, and only has to make one simple payment every month. All your tenant has to do is pass our standard reference checks, and we’re up and running.

As the landlord, all you have to do is sit back and relax, safe in the knowledge that the team at Howsy have got things covered. There’s no hidden admin hassle to worry about, and as we are the policy holders, we deal with any claims on your behalf. The scheme is insurance-backed and therefore fully protected under the Financial Conduct Authority, the Financial Compensation Scheme and the Financial Ombudsman Service, meaning it is completely regulated for your peace of mind.

Should you have to make a claim, Howsy Club works slightly differently to a traditional deposit scheme does. When your tenants come to move out, we will undertake a check out using your original inventory, checking that everything in your property is left exactly as you expect it. If so, great news – your tenant can move on, and we can help you re-let your property. However, if there are any issues that need to be addressed, we will detail the issues and request payment directly from your tenant.

If the tenant wants to dispute the issues raised, they can notify the team here at Howsy within seven days, and the case will be passed to an independent adjudicator. At this stage, the process is very similar to a ‘traditional’ deposit adjudication. Everything is overseen by the third party, who will request evidence from us, and your tenant. We will supply the original inventory and images and check out data and images, and the adjudicator will make an impartial decision based on the evidence provided.

Should your tenant fail to pay, we can make a claim under the Howsy policy on your behalf. Upon receipt of funds – from our policy or your tenant – we will arrange to have any remedial work carried out at your property to make sure it is ship-shape and ready to rent again, or in the case of rent arrears, pass them straight back to you.

Why should I change what I always do?

So much has changed within the private rented sector over the past few years, our head is spinning! It’s much harder to be a landlord now than it was two, five, ten years ago, and here at Howsy we believe that simplicity is the best way forward – for everyone.

With Howsy Club, not only is the process simple and stress-free, but it also brings a raft of additional benefits that the ‘traditional’ method doesn’t, for both landlord and tenant.

For you, the landlord, the primary benefit is of course knowing that your property is protected by a safe scheme is the most important. However, Howsy Club delivers so much more:

  • The nature of the scheme means that you are able claim up to six weeks’ worth of costs, instead of the industry standard of five. As the scheme isn’t a deposit, but an insurance, it is not restricted by the Tenant Fees Act 2019 in the same manner.
  • Cleaning costs, dilapidation costs, removal of tenant’s furniture and rent defaults are included within the policy, as you would expect from any ‘standard’ deposit scheme.
  • This is a huge draw for prospective tenants. When advertising your property, you are offering the equivalent of up to £2000 cash back! Who wouldn’t want to take you up on that offer?
  • Best of all, there is no additional cost to you! In a competitive and ever more complex market, you can take some stress off of your shoulders at no extra cost and become part of the Howsy Club.

How do I convince my tenants?

Howsy Club hasn’t left tenants out of the list of benefits. As well as saving money, we’ve got a tasty little benefit that might help your tenants spend a little of that spare cash they’ve got left over…

Every Howsy Club membership comes with a complimentary tastecard+ membership, an exclusive members-only benefit that provides access to a huge range of offers across the UK.

50% discounts on dining at 6,000 UK restaurants, offers at theatres, comedy, cinema and live music events, and 2-for-1 at to UK attractions, there’s something for everyone with this great little flexible friend.

We are so passionate about Howsy Club, we are now offering it as standard to all our landlords as part of every Howsy Standard and Protect package. For more information on Howsy Club speak to one of the team today on 0330 999 1234.

Identifying top tenants: Who’s perfect for your property?

by Lewis JonesPosted on

With more people looking to the private rented sector than ever before, identifying your top tenants is key, and understand what your target audience are looking for.

Knowing exactly the sort of tenant that is likely to fall in love with your property is the first step to designing the perfect property marketing campaign.

However, identifying that market segment doesn’t just stop with what lies behind the front door. Taking a wider view at the surrounding neighbourhood and local amenities is really important when it comes to understanding who may be interested in your property.

Young professionals

Working professionals are considered by many to be the ‘ideal’ tenant. In a stable profession, this type of tenant is often keen to find a property based around providing a good work/life balance, providing them with a simple commute, and ability to make the most of their downtime.

As businesses move their headquarters from major UK cities out to more regional locations, we are seeing more young professionals move with them, and as such the rental landscape is shifting as we flex to suit the ever-changing locations of this huge market segment. Identifying the needs of these top tenants is key, so what exactly are they looking for in their perfect prime location?

Close to public transport

Whilst arguably a huge draw for anyone, busy professionals are likely to have a real need for easy access to public transport. Convenient travel into or around the nearest major town is a great asset, and if your property has good access to major hospitals, universities or business centres, that’s a huge plus too. 

Nearby shopping, restaurants, gyms

Taking time to unwind is vital, and being located close to shops, cafes, restaurants and gyms puts a big tick in the box. You can help your potential tenants really make the most of these exciting benefits with Howsy Club, a new initiative from Howsy aimed to revolutionise renting for both tenant and landlord. The scheme replaces high rental deposits, with a manageable monthly fee and delivers a host of additional benefits to the landlord. In addition, tenants receive a free Taste Card, giving them access to 2-for-1 meals at over 6000 UK restaurants.

Good internet connectivity

With more and more people working from home, super-fast broadband speeds are a becoming a prerequisite for tenants across the board, with many hoping to find properties pre-connected and ready to log on as they move in.

Families

As the housing market continues to creep skywards, the age demographic of renters is creeping up with it, and we are seeing more and more families look to the private rental sector to fulfil their housing needs.

This section of the market generally has a very specific wish list when searching for the perfect family pad, and identifying their top ‘wants’ is vital if you’re aiming for family tenants. But what exactly does the modern family look for in a dream neighbourhood?

Parking

Children bring with them plenty of things. From pushchairs to rugby kits, every parent knows that the day their child comes into the world is the day they wave goodbye to skipping out of the house with just keys, phone and wallet! With this in mind, it is no surprise that off-street parking is a huge bonus to families.

Great schools, nurseries and childcare

If your property is within the catchment area of a great school, it can be a major draw to parents looking to enrol their child. With entry restrictions often very tight, having the perfect postcode can make all the difference. Access to great nurseries and childcare options is also very important to many parents, so do your research on the options locally.

Parks and open spaces

No matter how perfect the property, there is no replacement for getting outside and having a run around in the open air. If you have great amenities such as parks, youth clubs or sports centres on your doorstep, shout about it!

Low crime rate

Obviously, this is an important element for everyone. However, with increasing fear around gang culture in teens and young people, this is a very real concern for parents of young adults. A safe and calm neighbourhood with active regional Neighbourhood Watch schemes or community support may offer peace of mind, and edge ahead over an area without such benefits. 

Students

Student tenants are key to the rental market of some of the UK’s major towns and cities, with student-based rentals making up a high percentage of some region’s private rented market.

However, this sector is not without its challenges and often requires slightly more hands-on management as students take their first steps on the path of independent living. But what regional benefits appeal to this young rental range?

Nightlife and entertainment

It may be an age-old joke, but easy access to bars and nightlife could be a real benefit to students, who may be excited to take the opportunity to make the most of life in their new city. Speedy routes to nightlife hotspots will appeal to students, whilst safe, well-lit streets will appease parents!

Life within walking distance

When it comes to prioritising how to spend a student loan, it is highly unlikely that many will choose to budget for a car… With this in mind, having all major amenities within walking distance is important to student tenants. Taking a stroll around the neighbourhood and jotting down walking times to university campus, local supermarket, transport facilities and restaurants, cafes and bars can help provide clear details in your advert. 

Mature tenants

Whilst students starting out on their rental journey is one end of the rental range, there is a widening part of the of the market appealing to a more mature tenant. Many landlords identify this market sector as top tenants due to them often looking for long-term, reliable tenancies and a good relationship with their landlords, what more could a landlord want?

With older tenants making up a growing part of the private rental sector, it is important that landlords are aware of the needs and desires of this tenant type. Finding the right neighbourhood is often key to more mature tenants, so what are they looking for? 

Access to medical care

As with schools, many doctors’ surgeries operate on a postcode system for patients. More mature tenants may be aware of the need for easily-accessible medical care, and are likely to be looking for continuity of contact with existing healthcare practitioners.

Like-minded neighbours

Feeling that you fit in within a community is key, so mentioning that the property is located in a ‘quiet residential street’ is likely to be appealing to a more mature tenant. Living in a property located amid busy restaurants, or sandwiched between student accommodation is unlikely to tick any boxes.

Identifying top tenant selling deires in your neighbourhood and highlighting them in your advert can bring a real boost to your marketing potential.

For some top tips on writing your advert, read our quick guide here. Alternatively, let the team at Howsy give you a hand crafting the perfect advert, designed to showcase the top selling points of your location, and property.

Give our team a call today on 0330 999 1234 to see how we can help

Smoking and Vaping: Should it be allowed in a rental property?

by Lewis JonesPosted on

Stoptober, Public Health England’s 28-day campaign to encourage people to to give up smoking for the duration of October is well underway.

This nationwide campaign has seen over one million people attempt to stub out the habit, taking action on smoking and health, and is the biggest mass attempt to quit in the country.  

All this is great news for landlords. A whopping 53.6% of smokers in the UK rent within private or housing association properties, however only 7% of private landlords are open to letting their tenants light up – so there’s a serious issue burning away in the sector.

Can you stop a tenant smoking in a property?

Including a clause in a tenancy agreement stating that no smoking is allowed in the property would make it very clear that this behaviour is not acceptable under the terms of the lease, and that the tenant is acting outside of the terms that have been agreed to. It would be possible at this stage to terminate the lease based on breach of contract via a Section 8 notice.

However, landlords are under an implied obligation to allow their tenant quiet enjoyment of the property, meaning a landlord must not interfere (or allow anyone else to interfere) with the tenant’s enjoyment of the property. It could be considered that if a tenant is a smoker, not being able to smoke in peace in their property could be a breach of their quiet enjoyment of the property. At this stage, it would be down to the discretion of the judge to decide who was the party in the right.  

With this in mind, it is worth considering that if by the stage that these new developments have come to light, the damage may already have been done. If a tenant has already been smoking in the property, the smell – often the worst element – will already be present. Rather than going through the process of eviction which can be costly and drawn out, you could consider choosing not to renew the contract at the end of the term, and instead spend the money on a spruce up of the property when the tenant has left.

How is vaping different to smoking?

Over 2.3 million adults in the UK already ‘vape’, and with many people moving away from cigarette smoking and onto vaping kits, it’s likely that the question of whether or not to allow electronic cigarettes or vaping is one that could be faced by many landlords.

The potential damage caused by cigarette burns and the lingering cigarette smoke smell are often key reasons cited for landlords not wanting to allow smoking in their property. Damage from nicotine build up on walls and ceilings from smoke and ash are others. Vaping theoretically removes these issues, but should it carry the same rules?

A cigarette, cigar or pipe requires a flame to burn to be smoked, an e-cigarette or vape is powered by a rechargeable battery, and uses liquid nicotine to produce a mist, or ‘vapor’ which is then inhaled. Although vaping produces a cloud of vapor once dispersed this leaves no trace, unlike smoking.

Choosing whether to allow your tenants to vape is a personal choice, however, unlike smoking it is likely to be very tricky to detect if they are doing so in your property unless they come clean about it. If your tenant is open about their vaping habit, you could choose to include a banning clause in the tenancy agreement– although this is likely to be near impossible to enforce. Alternatively, you could allow vaping, but refer to the ‘no smoking’ clause in the tenancy agreement, and reiterate that vaping and the use of electronic cigarettes are acceptable, but a smoking ban is still in place.

What if you have more than one tenant?

If your property has any Common Parts (the shared areas of a property shared by multiple indiviual tenants – kitchens, bathrooms, toilets, staircases, entrances etc) you must be significantly stricter about enforcing a smoking ban in your property. This is because your property is directly affected by the National Smoke Free Legislation, the same law that impacts our workplaces, cafes, bars and pubs, and your tenants are protected from the health risk of second hand smoke. There are no vaping guidelines within this remit.

Not only is smoking not allowed in these areas, but signs and documentation must be displayed to comply with the regulations. Downloadable copies of the official template signs are available here. Your local authority will have an appointed smoke free officer who can assist with any queries on how to modify your property to comply with the smoke free legislation.

Howsy’s Top Tips for dealing with this burning issue:

  • When advertising for a prospective tenant, specify non-smoking only
  • Include a clause in your tenancy agreement that smoking/vaping in the property is not permitted
  • Reiterate your feelings when you meet with your tenant, and explain your reasons
  • Ensure that all of your insurance policies accurately reflect your tenant’s habits – update if necessary
  • If you have shared areas, make sure ‘No Smoking’ signs are clearly displayed

Affected by Upad’s closure?

by Lewis JonesPosted on

We were truly sorry to hear the news that Upad has closed its virtual doors.  We know how stressful this must be for both customers and employees alike. 

But what should you be doing to make sure that this sad announcement doesn’t impact you, or your tenants?

1. Notify your tenants

Landlords are likely to have heard the news through the sector press or via correspondence from Upad, but do make sure that your tenants are aware – especially if your property is under management, Upad managed your deposit or you are in the process of sorting out a new tenancy. Keeping everyone in the loop at this stage is vital! A quick email letting them know and directing them to the statement on the Upad website is a good start.

2. Sort out the rent

If Upad was collecting rent on your behalf, make sure that any rent is now paid directly to you.  Legally, all letting agents are required to hold all client money in a separate ringfenced account, so your rent payments should be perfectly safe, however Upad will stop collecting by direct debit after October 10th, so landlords and tenants should make immediate alternative plans for upcoming payments to prevent any confusion.

3. Get back any owed money

If you paid for a Upad advertising package, and you haven’t found a tenant, then you could claim for your money back.  Upad are saying that anyone who bought since 1st October should get a refund, but not if you bought prior to that. 

Assuming you bought it with a debit or credit card, it may be quicker and safer to try and claim back the money now regardless of the date of your purchase.  You can do this via the ‘chargeback schemes’ operated by the card networks (Visa, MasterCard etc.).  They will refund payments made by card if the company goes bust before receipt of goods.  You need to contact your bank or credit card company to start the chargeback process – call the number on the back of the card. Make sure you have your Upad transaction details to hand.  You have 120 days to make a chargeback claim from the point of purchase, so don’t leave it long. 

If you paid by PayPal, then it’s a similar process, but called a Dispute, which is then escalated to a Claim. Go to your PayPal account and start a dispute ensuring it is categorised as ‘Item Not Received’

If you are owed money that wasn’t paid by card, then a lot will depend on what actually happens to Upad.  This government guide details how to claim money from companies in liquidation.

4. Make sure your property is legal

It would be wise to do a quick audit of the paperwork you have for your properties, and take note of anything you have outstanding, or can’t lay your hands on. Make sure you can locate all the relevant copies of required documents such as gas safety certificates, EPCs, HMO licences that the Upad team may have arranged for you so that you know you are fully compliant. If you can’t dig them out, you can trying contacting Upad on [email protected]. 

If you are having trouble finding any of the vital legal documents, don’t panic. Here at Howsy we can arrange everything to ensure you are compliant with the law – give our team a call and we can help fill in any gaps!

5. Manage the deposits

Any tenant deposits are protected by the Tenancy Deposit Scheme.  They have been moved from TDS’s Insured Scheme to their Custodial Scheme.  This means that landlords will be able to manage the deposit directly, and that tenants and landlords can apply to TDS for deposit repayment when the tenancy ends.  TDS say that they will contact all tenants and landlords by email soon, so get in touch with them if you haven’t heard anything by the end of October.  Details of TDS’s message for Upad customers are here. 

6. Serve notice

It’s probably an academic point as Upad looks like it is ceasing trading, but you should also serve them notice just to make sure that you’re acting within the bounds of your contract with them.

7. Get your property let

If you were in the process of getting a tenant, then next steps are dependent on what stage you’re at in the process.

If you have found a tenant that you want to proceed with, and are happy to handle the ongoing admin of drawing up contracts, references, right to rent checks and managing deposits, you are perfectly placed to proceed without Upad. 

However, if your property is currently being marketed online (visible on sites such as Rightmove and Zoopla) via Upad, then it may be best to just to start again. You will be unable to access the tenant details that show interest at this stage, so the advert won’t be doing anything for you.

To move on as quickly as possible, there are a few simple steps to take:

  • Copy the URL (the website address) of your property advert.  Find it on Rightmove or Zoopla and take a copy of the link – it will look something like www.rightmove.co.uk/property-to-rent/property-6xxxxxxx.html.
  • This listing may disappear, however it is useful to be able to pass this on to a new agent if you can. It’ll help provide key details about your property – saving you time and helping get you back online quickly.
  • Get in touch with another letting agent as quickly as possible to avoid losing out on valuable marketing time. Every day counts if you have an empty property! 
  • If you have tenants in situ, don’t forget to keep them notified with regards to what’s going on.

If you are looking for another tenant find only service, then we’d recommend Urban.co.uk.  Their simple and efficient system will get you back up and running as quickly as possible.

If you are looking for a more comprehensive level of lettings management, then get in touch with Howsy. Our 24/7 property management team provide an end-to-end service, from tenant find and rent collection, to repair management and renewals. 

We can pick up where Upad left you, all for a low, fixed monthly fee.  Just either give us a call on 0330 999 1234, request a call back here, or fill in your details and we’ll get in touch.

Help is at hand at Howsy!

Noisy Tenants? Top tips to help dial down the volume

by Lewis JonesPosted on

There’s nothing worse than a noisy neighbour, in fact noisy tenants with no volume control are one of the biggest causes of complaint to landlords.

But what are our tenants up to that is so loud? The most common complaints we hear at Howsy include:

  • Noise from pets
  • DIY
  • Parties / loud music
  • Shouting / Loud voices
  • Unattended car alarms

All very frustrating noises to live next door to.

However, there are some noises that, whilst possibly very maddening to listen to are not classed as anti-social behaviour and cannot be addressed by local authorities. These include:

  • Traffic, trains and planes
  • Children playing inside or outside the property
  • DIY activities during the daytime or early evening (Monday-Friday 8am-6pm / Saturdays 8am-1pm)
  • Noise resulting from the ordinary use of a property (Including footsteps, doors closing, toilets flushing, and household appliances being used during the day time and early evenings).
  • Fireworks before 11pm, except on certain dates (until midnight on 5 November, until 1am following the first day of Chinese New Year, until 1am on the day following Diwali day, until 1am on the day following 31 December)

But what can you do if your noisy tenant is causing upset? Before you start delivering ear plugs, there are a few options to try…

Who is responsible for noisy tenants?

Whilst as a landlord you do have plenty of legal responsibilities (you can read more about them here) you are under no legal obligation act on unnecessary noise complaints from a neighbour. However, it is in your best interest to ensure that neighbours are happy – after all, they are your eyes and ears and it is important to keep on their good side.   Wherever possible, it is always good to help smooth troubles waters if you can.

Whilst unlikely to contain a specific ‘noise clause’, some tenancy agreements will contain a clause requiring your tenant to not do anything in the property that causes them to be a ‘nuisance’, and all-night parties every evening would certainly contravene that clause. In this instance, you would be within your right to start section 21 proceedings against the tenant on the basis of a tenancy breach, eventually ending in eviction (however it is unlikely that many landlords would do so if the individual was an otherwise good tenant, and the party was a one-off)!

How to deal with noisy tenants

Very often, having a chat to your tenants can be the best first step to managing this issue. Keep things light and friendly, and mention to them that their actions are causing distress. They may not be aware that whilst they may find heavy metal relaxing to fall asleep to, their habit is causing their neighbours sleepless nights! Try and work with them to come up with a solution to the problem. For example, if the noise levels from their midnight trumpet practice are keeping everyone else awake, rather than demanding they stop entirely, ask if it would be possible for them to stop at 10pm – meet in the middle!

Popping them a message after your chat can be a good idea. A quick text to say ‘thanks for being so understanding about my noise concerns when we spoke earlier, hope your trumpet concert goes well!’ is simple and to the point, but reiterates the chat, and also gives you written and dated proof that the conversation took place.

This evidence is also useful if the causal chat doesn’t work and you need to move to the next step, involving the local council. Collecting evidence that you have tried to remedy the situation yourself is key, as is collecting as much detail about the noise as you can.

It can be difficult for official bodies to investigate noise nuisances, as often it can be sporadic and takes place at inconvenient hours. Making sure you ask the complainant to make clear audio recordings of the noise when it happens (recordings on a phone is fine) and logging the times and dates could be invaluable to a subsequent investigation.

What to do if you live next to a noisy tenant

If you are the suffering neighbour living next to a noisy tenant, contacting their private landlord, housing association or the freeholder can be a good place to start if you would like to elevate the situation. Whilst ideally you would give your neighbours a friendly knock and have a chat with them about the noise issues, in some cases it can be easier to alert the landlord immediately, and ask them to manage the situation on your behalf.

What if that doesn’t work?

If reasoning with the noisy tenant doesn’t work, the last resort would be to involve your Local Authority’s Environmental Health Department. Legally, this department has a responsibility to manage any noise disturbance that is considered to be a ‘statutory nuisance’ under the  Environmental Protection Act 1990, which includes anything which is considered to ‘unreasonably and substantially interfere with the use or enjoyment of a home or other premises’ or ‘injure health or be likely to injure health’. However, they are reliant on evidence to process a case – so audio recordings, dates and details are vital here.

Once a case is underway, the occupier will receive a letter saying that they are the subject of an investigation regarding noise disturbance, however your identity as a complainant is kept confidential (many neighbours and landlords choose to skip straight to this route for this very reason). Having examined the evidence, if it is deemed that the noise problem is too loud and the tenant isn’t willing to do anything about it, the council can issue an abatement notice. This strict legal action instructs the individual to cease or limit noise it to certain time of day. A word of warning though, the abatement notice can be served on an individual or the owner of the property – potentially the landlord.

What if they do not stop?

The individual does have the right to appeal an abatement notice, but this is a strict 21-day window. If they do not launch an appeal in this time, they are not able to do so.

Once the individual has received an abatement notice from the council, it is a criminal office to fail to comply with the requirements set out in the notice. In the event of a breach of the notice, the recipient can face prosecution and a hefty fine.

Should it get to this stage, if the property is rented it is possible that the unsuspecting landlord could be facing bigger problems than a noisy tenant. There have been cases in the past of tricky tenants leaving a rental property, and disappearing, thus landing their unfortunate landlord with the fine from a breached abatement notice!

Howsy’s Top Tips

  • If you have a noisy neighbour, notify landlords and managing agents of any issues
  • Keep a clear record of the situation – recordings, dates and conversations
  • Raise issues to Environmental Health if not rectified
  • Be patient – Environmental Health can take up to 12 weeks to process a case
  • Closely monitor any tenants who are causing a noise nuisance – make sure they are abiding by the rules!

Rent guarantor – what you need to know

by Lewis JonesPosted on

Landlord, tenant or guarantor  – we’ve got the answers to your most important questions.

Renting is a big financial commitment involving risk for both landlord and tenant. If you’re a landlord who’s not confident that a prospective tenant can pay the rent – or you’re a student or recent graduate finding it difficult to prove you can afford the rent, or you can’t pay a whopping 12 months’ rent upfront – it’s worth considering getting a rent guarantor.

What is a rent guarantor?

A rent guarantor is a person, a company or an institution that agrees to be a tenant’s financial back-up. If the tenant doesn’t or can’t pay the monthly rent, the guarantor is liable to pay for them. They are legally bound to cover all the tenant’s debts – which could be thousands of pounds – so that the landlord is not out of pocket. This is why many tenants turn to their parents, other family member or a very close friend to be their guarantor.

Who can be a rent guarantor?

A financially stable individual, a specialist company, or an academic institution.

A guarantor needs to have more money than the tenant, generally be a UK resident and UK home owner (it’s much harder to chase debt abroad), and be willing to go through rigorous checks, including a credit check and any other check the landlord requests to prove they can afford to cover the tenant’s costs on top of their own living expenses.

Thankfully, these days there are several alternative options if friends or family can’t or won’t help out. We talk about this in more detail below.

Is a rent guarantor liable for unpaid rent?

Yes. Which is why the role is a serious responsibility and should not be taken on lightly, nor without being crystal clear about exactly what’s being signed up to. There are many stories of guarantors who find themselves surprised and stressed that they’re being asked to pay their relative’s rent.

As with any legal contract, always check what the guarantor agreement says. A guarantee agreement may also state that the guarantor is responsible for other conditions under the tenancy, such as:

  • unpaid bills, including council tax
  • damage caused to the property
  • if a shared property, other joint tenants’ unpaid rent
  • legal costs faced by the landlord because of the tenant.

Be absolutely sure of your obligations, as they’re difficult to get out of.

On a positive note, a guarantor is free to negotiate the terms of the guarantee agreement with the landlord before signing anything.

Landlords

When can a landlord contact a guarantor?

When your tenant owes you money. At this point you can send a rent demand letter to the guarantor. Send copies of all correspondence about rent arrears or other breaches of the tenancy agreement to the guarantor. The guarantor could become liable for the debt if the tenant doesn’t pay.

Tenants

I need a rent guarantor but can’t find one. What do I do?

Good news; you have options, especially if you’re a student. Your university or a specialist company can potentially act as your guarantor. Both work with letting agents and landlords to ensure the agreement is professional and legally binding.

For a fee, rent guarantor services will act as your UK guarantor. How much you pay depends on the amount of rent you plan to pay, and whether you’re working.

UK Guarantor https://ukguarantor.com/ can secure you a rent guarantor the same day you apply. 

YourGuarantor https://www.yourguarantor.com/ acts as a UK guarantor for students attending UK universities for at least 3.5% of the rent, with no minimum fee.

Housing Hand https://www.housinghand.co.uk/ helps UK-based students, recent graduates and working professionals get their first choice of accommodation .

All let you apply online for free.

Many universities, including the London School of Economics, offer their own rent guarantor service open to both UK-native and international students. It lets your university act as your guarantor to help you become a private renter and pay your monthly rent in full and on time.

Note that even these schemes require the meeting of certain criteria. For example, you don’t owe them money, and you have a satisfactory academic record.

Guarantors

How much does a rent guarantor need to earn?

It depends on what the individual landlord asks of them, but generally it’s three times the amount of the rent. Often, proof of income isn’t enough, however. Strict landlords will likely need a guarantor to be a UK homeowner and have ample savings, too.

What happens if a rent guarantor refuses to pay?

If the rent guarantor refuses or fails to cover any unpaid costs, the landlord can take legal action against the guarantor.

How can I stop being a rent guarantor?

It’s not easy but it is possible, typically when there’s a change in the tenancy agreement. For example, a change to the rental fee or a renewal of the tenancy would count as a variation unless:

  • the tenancy agreement says that the guarantee applies to any future variations or renewals, or
  • the guarantor agrees to the variation.

Can rent guarantors give notice?

As a general rule, no. Not within the fixed term of the agreement. However, as always, it depends on the wording of the guarantee. You might be responsible for covering rent arrears for however long the tenancy lasts, and for any increases in the rent. But if the tenancy turns into a periodic tenancy, the guarantor can then give one month’s notice.

What checks are done on a rent guarantor?

A guarantor goes through the same detailed referencing process as a tenant, including credit checks, a CCJ check and employer checks, plus extra checks, such ownership of property with HM Land Registry.

What happens if a guarantor can’t pay the rent?

Unless the guarantee provisions say otherwise, the guarantor carries on being liable even if s/he falls ill or loses their job.

If they’re declared bankrupt, then depending on the circumstances, the landlord may be a creditor in the bankruptcy for anything owed. And if the guarantor was to die, the landlord may be able to claim against their estate. Again, it depends on individual circumstances and what it says in the guarantee agreement.

Rent Guarantee Insurance : the facts

by Lewis JonesPosted on

Sometimes even the best tenants fail to pay their rent. Landlords – protect your income and mortgage by getting specialist insurance cover. Here’s what you need to know.

Rent guarantee insurance is much like any other form of insurance. For a relatively small monthly or annual fee, it will pay out money in the event of a loss – in this case, rental income loss when a tenant can’t or won’t pay.

Landlords can make a claim to their insurance provider when the tenant has failed to pay a fixed minimum amount of rent – usually one month’s worth. However, the majority of policies stop you from making a claim within 90 days of purchase.

Naturally, the exact level of cover and any additional extras depend on the policy you buy. Most rent guarantee insurance policies have terms and limits, so it’s important to read the small print.

Do I need rent guarantee insurance?

In a 2018 Government survey of English private landlords, the most common reason for evicting, asking a tenant to leave or not renewing a tenancy was rent arrears (58%).

Redundancy or illness can hit even the most well-intentioned of us at any time. If your tenants suddenly struggled to pay their rent, would you be able to cover your outgoings? And would you be able to afford potential legal fees necessary for recovering what you’re owed?

If the answer’s ‘no’, getting rental guarantee insurance is likely a good idea. For even the most thorough of landlords it can prove a financial lifeline when problems happen.

It can also help resolve other potentially very stressful related issues, such as:

  • If your tenant deliberately damages your property. 
  • A dispute arises with your tenants over renovations or repair works. 
  • Your tenant won’t leave your property, even after an eviction notice.

How much does rent guarantee insurance cost?

Typically, a few conditions need to be met before you can buy rent guarantee insurance. For example, your tenants must have passed tenant referencing checks. If you need to make a claim it’s your responsibility to provide completed tenant referencing documents.

How much is the excess?

The insurance excess is the fixed amount you have to pay if you make a claim on your policy. An excess of one month’s rent is typical, but check with each provider when researching quotes as you may be able to lower it or get a no-excess policy.

Does it include legal protection?

Typically, landlord rent guarantee insurance is sold as a joint policy with legal assistance insurance, which means the landlord’s legal costs of recovering the rent and/or evicting a non-paying tenant are covered too. Some policies include additional 24 hour-legal support.

Is rent guarantee insurance tax-deductible?

Yes. The full cost of a policy is tax-deductible against your rental income.

To get the best deal possible, Howsy recommends comparing quotes from a range of insurance providers or calling us directly. We offer something even better.

One of Howsy’s services for landlords is called Howsy Protect, and gives you Rent Guaranteed. If a renter is late paying their rent, you’ll be paid in full, regardless. If an eviction is necessary, we’ll cover any missed rent, as well as the legal and eviction costs. If this sounds interesting, why not register and find out more?

Periodic Tenancy

by Lewis JonesPosted on

Whenever a residential property is rented out, there’s typically a written contract between landlord and tenant that sets out the period of time for which the tenancy will last – normally six months or a year. But what happens when this period of time ends? Is agreeing a new fixed term always the best way forward? Let’s look at the options.

What is a periodic tenancy?

Most private tenancies start with a fixed-term tenancy, so called because it stipulates an agreed fixed term of time. During this time both parties are legally bound – the tenant to pay rent for the full term, and the landlord to allow exclusive, safe possession of the property.

Once the fixed term of a tenancy has expired – and unless a new fixed term is agreed to – all tenancies automatically, by law, become periodic tenancies. Unlike a standard assured short hold tenancy, a periodic tenancy rolls on week by week or month by month, for example – with no end date. There’s no fixed term, in other words.  The periodic tenancy simply continues ‘running’ until one party, landlord or tenant, gives notice.

If your tenant wants to stay in your property at the end of their contract and you are happy for them to stay, you have two options.

You can prepare a new assured shorthold tenancy contract for both parties to sign. Or you can simply allow the original tenancy to become ‘periodic’.

If – without giving notice – a tenant stays even one minute past midnight on the last day of the fixed term of your contract, the agreement between you automatically becomes a (statutory) periodic tenancy, and the tenant will have to give proper notice, unless you agree to them leaving.

There’s no legal obligation to give tenants a new fixed-term contract; some tenancies run on happily for years on a periodic basis.

Statutory periodic tenancy

Most periodic tenancies are by default statutory periodic tenancies because they were created by statute law.

The majority of private renters are contracted by assured shorthold tenancies, which were established and are regulated by the Housing Act 1988. Section 5 of the act states that if the tenant remains in the property after the end of the fixed term, then a new ‘periodic’ tenancy is automatically created.

It goes on to say that the periodic tenancy:

  • Starts immediately after the fixed term ends
  • Is between the same people who were the landlord and tenant at the time the fixed term ended
  • Relates to the same rental property

Be ‘periodic’, meaning it will run from period to period – normally monthly or weekly.

Under a periodic tenancy, all the terms and conditions of the original contract continue to apply, except that your tenant can end the contract at any point by giving you a minimum of one month’s notice.

Contractual periodic tenancies

You have a contractual periodic tenancy if your last agreement was either a:

  • rolling contract with no end date, or
  • fixed-term tenancy with a clause that says it would become a periodic contract when the fixed term ended.

One of the plus points of contractual periodic tenancies is that the landlord can specify what the period of the periodic tenancy will be. It allows for and creates some certainty for you.

How long can a periodic tenancy last?

In most cases, the period will be monthly or weekly, depending on what the payment terms are in the original tenancy agreement. 

However, if the last payment of rent was different – for example, tenant paid three months in advance in one payment – then the period of the tenancy will reflect this last payment, in this case, three months.

Is a periodic tenancy a good thing?

It depends on what you need. It’s certainly not a bad thing.

If you or the tenant are uncertain of your plans – you may be thinking of renovating or selling your property, for example – it may be better to let the tenancy run on as a periodic because it gives you more flexibility.

It also suits landlords who are concerned about the behaviour of a tenant. A periodic tenancy allows tenants to stay on a month by month basis only if you consider them to be behaving well, month to month.

What are the dangers of a periodic tenancy?

It’s good to be aware of the risks associated with periodic tenancies. Here they are:

  • The tenant could leave at any time with only a month’s notice
  • The original contract might eventually become out of date because of new laws. A contract that doesn’t cover all legal requirements is effectively useless and could even lead to the tenant making a financial claim against you

Under a statutory periodic tenancy the landlord, not the tenant, is liable for paying council tax on the property if the tenant leaves during their notice period.

You can avoid this by creating a ‘contractual periodic tenancy’, either by stating in the original contract that the tenancy will become a ‘contractual periodic tenancy’ at the end of the original period, or by issuing a new contractual periodic agreement.

Can a landlord increase the rent on a periodic tenancy?

Yes, you can. A periodic tenancy offers the option of upping the rental fee at any point during any 12-month period. Of course, you need to give the tenant fair notice first.

Can a periodic tenancy start straightaway?

Yes, it does automatically by law.

What is the notice period for a periodic tenancy?

How much notice a tenant needs to give you on a periodic tenancy depends on what type it is. Do you have a statutory periodic tenancy? Then the tenant must give at least:

  • one month’s notice for a monthly tenancy
  • four weeks’ notice for a weekly tenancy.

Whereas with a contractual periodic tenancy the landlord has more control and flexibility. The tenant must adhere to the notice term decided by you and written in your tenancy agreement e.g. two months. In other words, the tenant’s notice period is stipulated by you.

How much notice does a landlord need to give on a periodic tenancy?

Once a tenancy has become periodic, a landlord must give the tenant at least two months’ written notice through a section 21 notice to leave the property, and terminate the tenancy.

I’m a tenant and just made an offer for a property, what happens next?

by Lewis JonesPosted on

We’re really glad that you’ve decided to place an offer on one of our landlords’ properties. The great news is, if your offer is accepted you can look forward to zero fees and having your credit score improved as you pay your rent each month.
Howsy is a platform that connects landlords and tenants. Our team is here to help throughout the entire process but ultimately the landlord chooses what happens next. Sometimes our landlords tell us to accept reasonable offers on their behalf, sometimes they’ll ask us to help facilitate a negotiation. In some circumstances, they will take some time to consider. We’ll do everything we can to speed up the process – by reminding the landlord or offering advice, but ultimately the decision is always the landlords. Please have patience and rest assured we will keep you updated every step of the way.