Charity warns over increased reliance on guarantors under reforms

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Charity warns over increased reliance on guarantors under reforms

A charity has warned that guarantors could become a default requirement for low-income tenants following the ban on rent in advance.

In a guest blog post for Crisis, published by the TDS Charitable Foundation, it said landlords should not have to choose between managing risk and being accessible.

The comments come as the Renters’ Rights Act came into force on 1 May 2026.

Guarantor requirements can create barriers

According to the TDS Charitable Foundation, 91% of landlords who let to local authorities, including homeless households and people receiving benefits, report satisfaction in their role, compared with 63% of landlords overall.

Tenants receiving benefits are also 10% more likely to remain in their homes for three or more years, offering landlords more stable, long-term occupancy.

However, under the Renters’ Rights Act, landlords and letting agents can no longer accept rent in advance.

The charity says many tenants will welcome the change, but warns that guarantors could become the default alternative.

Dr Jennifer Harris, head of policy, research and social impact at the TDS Charitable Foundation, said: “The Renters’ Rights Act introduces a cap on upfront rent, a change many tenants will welcome, given that 17% of tenants nationally identify it as a barrier to accessing a home, according to the TDS Charitable Foundation’s national Voice of the Tenant survey.

“But if guarantors simply become the default replacement, the barrier doesn’t disappear, it shifts. People on lower incomes or with experience of homelessness are often unable to provide a guarantor, and our research shows guarantor requirements create real access barriers for around one in ten tenants.”

Clear communication to landlords

Dr Harris added that when asked what would encourage them to let to people moving out of homelessness, more than a third of landlords said a rent guarantee scheme would be their preferred incentive.

She said: “The message to landlords is clear: you don’t have to choose between managing risk and being accessible.”

The research also claims there is “no evidence of a mass landlord exodus”, but points to data showing that 20% of landlords letting to housing benefit tenants had sold at least one property. By 2025, that figure had risen to 37%.

The charity is urging the government to better understand what is driving landlord exits from the affordable end of the market, and is also calling for Local Housing Allowance (LHA) rates to be restored.

Dr Harris said: “In our Voice of the Landlord survey, a quarter of landlords said they felt unable to rent to people receiving benefits, and half cited the growing gap between LHA rates and market rents as a reason why. Restoring LHA rates to a level that reflects actual rents is therefore vital to protect the supply of affordable PRS housing.

“Clear communication to landlords about their Renters’ Rights Act obligations, along with ongoing monitoring of supply, will both be essential to prevent the Act from accelerating the very exits it is intended to prevent.”

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Tenants are renting for longer than planned

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Tenants are renting for longer than planned

Landlords are facing a tenant base that is staying put for longer, with new research showing many renters have remained in the sector far beyond their original plans.

LRG’s Spring 2026 Lettings Report, based on responses from 650 landlords and tenants, found that 60% of tenants in England and Wales are renting for longer than they expected.

Some 40% said they had been in the PRS for much longer than they had planned, while another 20% said it had been ‘somewhat longer’.

Just 1% of those surveyed have since bought a home.

Renting is the norm

Allison Thompson, the chief lettings officer at Leaders, which is part of LRG, said: “Renting for longer is no longer the exception – for a growing number of people it has quietly become the norm.

“What the data tells us is that most tenants have not chosen this; they have accepted it.

“And acceptance is not the same as satisfaction.”

She added: “The 32% who say they feel stuck and frustrated are a reminder that long-term renting works well when the home, the landlord and the price are right – and when tenants feel secure.”

Questions on periodic tenancies

Landlords appear divided, though not generally opposed, on whether the move to assured periodic tenancies will alter their approach to longer stays.

The survey found 42% of landlords said the change would make no difference to how willing they are to encourage tenants to remain long-term.

Another 15% said they would be more willing.

A further 15% said they would be less willing, while 29% were not yet sure.

Why tenants rent longer

The report points to rising house prices, stretched affordability and tighter mortgage access as reasons why tenants are remaining in rented homes rather than moving into ownership.

The length of time tenants spend in their current home also shows how settled many households have become.

The largest group (35%) have lived in their present property for one to two years.

However, 59% have been there for three years or more, including 23% who have stayed for more than a decade.

Only 5% said they had been in their current home for less than a year.

Tenant behaviour changing

The figures come as the Renters’ Rights Act moves the sector towards assured periodic tenancies which gives tenants the right to remain indefinitely.

For landlords, the data suggests the law is meeting a change already taking place in tenant behaviour, rather than creating it from scratch.

Among tenants who have rented longer than intended, 40% said they had accepted the position but still hoped to buy one day.

Another 23% said they had made peace with renting and that it now suited them.

However, 32% said they felt stuck and frustrated and only 4% said they had actively chosen to keep renting.

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Charity urges crackdown on letting agents

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Charity urges crackdown on letting agents

A charity has warned that renters are facing “rock-bottom service from letting agents”.

According to Citizens Advice, nearly half of renters (48%) who have dealt with a letting agent in the past three years experienced rule-breaking behaviour.

The charity is now calling for tougher regulation of letting agents, alongside stronger enforcement of existing rules.

Nobody should be left in dangerous conditions

Research by Citizens Advice reveals among renters with an emergency repair, such as a gas leak or unsafe wiring, more than two-thirds (68%) were left waiting more than 24 hours by their letting agent.

More than a quarter (27%) of renters with an emergency repair faced extra costs or higher bills as a result.

The data also reveals more than a quarter (29%) saw emergency or urgent repairs left totally unresolved.

Tom MacInnes, director of policy at Citizens Advice, said: “Private renters are forking out more than ever to put a roof over their heads, and in return they get a rock-bottom service from letting agents.

“Nobody should be left to live in dangerous conditions for days, have to fight for money they’re owed or be charged illegal fees. But our advisers are helping tenants with these kinds of problems regularly.”

Better regulation and tougher enforcement

The charity is now calling for the government to clamp down on letting agents, warning that failure to do so could undermine the progress made by the Renters’ Rights Act.

They argue the legislation should better protect tenants from issues such as disrepair.

Mr MacInnes said: “The new Renters’ Rights Act is a huge moment for private tenants, a reform Citizens Advice has long campaigned for.

“But this landmark legislation will only deliver its true potential if the government holds letting agents to account with better regulation and tougher enforcement of the existing rules.”

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Interest rate arbitrage explained

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Interest rate arbitrage explained

This week, I’m sharing two increasingly popular strategies that I use personally, but before I go any further, I should make it clear that the following reflects my own personal views and experiences. It is intended for general information purposes only and should not be regarded as financial or investment advice.

I also fully appreciate that the elements of one of the strategies discussed below may feel counterintuitive. This is because most property investors have spent years, sometimes decades, conditioning themselves to believe that lower gearing automatically equals lower risk.

I should also make it clear from the outset that I am naturally a cautious investor. While I managed to get comfortable with property and debt, I have never been comfortable with stock markets, cryptocurrencies, speculative trading, or investment classes such as gold and silver, where values can fluctuate dramatically. What I personally prefer these days are investments paying fixed quarterly coupon returns for fixed terms, where I can clearly understand the anticipated income profile, security position, and expected exit timeline before investing any money.

These types of investments do exist, including opportunities capable of producing the kinds of returns used in the illustration below, but many landlords have never heard much about them because they are not marketed to the general public in the same way as bank deposit accounts, ISAs, or mainstream investment products.

Under UK financial rules, many alternative fixed-income investments can generally only be promoted to High Net Worth Individuals and Sophisticated Investors. Broadly speaking, that means people with net assets of at least £250,000 excluding the value of their main home and pension fund. As a result, many of these opportunities operate quietly and are often only discovered via referrals from other experienced investors.

I will explain a couple of examples of the principle using the following simplified illustration.

A landlord with £3 million of equity generating £60,000 net annual income is effectively achieving a 2% return on equity before future capital growth is taken into account. That is the position many landlords now find themselves in: large property portfolios, low gearing, strong net worth, but relatively modest cashflow.

They continue to hold properties because they don’t know what to do for the best. Should they sell? If they do, what about CGT and the loss of future capital appreciation? Where would they reinvest the proceeds?

Some have considered retirement abroad or relocating to lower-tax jurisdictions such as Dubai, but remain undecided or feel tied to the UK due to family, lifestyle, or business considerations. There are often many other factors too, because no two people’s circumstances are ever exactly the same.

This is where an interest rate arbitrage strategy can become relevant. The principle is straightforward: borrow money at one rate of interest, invest it elsewhere at a higher rate of return, and retain the difference as additional cashflow. Banks and mortgage lenders operate this model as common practice.

A typical landlord example might involve refinancing part of a portfolio using a fixed-rate buy-to-let mortgage at 6%, then allocating part of the released capital into fixed-income investments paying higher coupon returns. The difference between the two rates can potentially create additional income generated from existing equity.

If £1,000,000 were borrowed at 6%, the annual interest cost would be £60,000. If the same £1,000,000 were allocated into investments paying fixed coupon returns of 10%, the gross annual income would be £100,000. The difference is therefore £40,000 per annum.

There are tax considerations, but let’s park that for now and focus entirely on the principles.

That £40,000 represents potential additional gross annual cashflow generated without increasing rents, buying more property, dealing with additional tenants, or taking on refurbishment projects. It is simply a different use of capital.

This strategy can be used both in the medium and long term. Some landlords simply want to buy themselves time before making decisions about selling properties. Others want to test alternative investments first, whilst still retaining most of their portfolio.

For many landlords, the issue is not a lack of wealth. The issue is that too much equity remains tied up inside property, producing relatively modest income returns compared to the amount of capital trapped within the portfolio. That often becomes more noticeable as portfolios mature, LTVs reduce, compliance costs rise, and retirement planning starts moving higher up the agenda.

The irony is that many landlords spend years trying to reduce gearing in pursuit of “safety”, whilst simultaneously trapping huge amounts of equity inside low-yielding assets producing relatively modest cashflow. In some cases, a carefully structured refinancing strategy can actually improve lifestyle flexibility, liquidity, and financial resilience rather than weaken it.

That does not mean that an interest-rate arbitrage strategy is suitable for everybody. It simply means there may be more options available than many landlords realise.

For landlords who have already released substantial cash sums, possibly from selling properties, there may well be other investment options that have not appeared on their radar yet.

Property118 consultants are familiar with the broader concepts discussed above and, where appropriate, may be able to help members identify suitable regulated professionals for further advice and guidance.

Most importantly, the objective of our consultancy meetings is not to pressure anybody into making investment decisions. The objective is to help landlords achieve clarity.

Sometimes that results in deciding to reduce exposure to property. Sometimes it results in refinancing and restructuring. Sometimes it results in taking no action at all, other than gaining reassurance that they are already on the right path.

The common factor is that landlords stop operating on autopilot.

If you have reached the stage where your portfolio has created substantial wealth but not necessarily the lifestyle, liquidity, or freedom you expected, perhaps it is time to start looking at the bigger picture.

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Landlords seek certainty as buy to let mortgage market shifts

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Landlords seek certainty as buy to let mortgage market shifts

Landlords are placing greater weight on certainty from lenders as rate movements, product withdrawals and shifting mortgage conditions continue to affect their buy to let decisions.

Landbay’s latest landlord survey found more than 80% of respondents now view the BTL market as unstable or unpredictable.

It found that 55.6% of landlords describe conditions as ‘somewhat unpredictable’ and 26.3% describing them as ‘highly volatile’.

The lender said the findings reflected disruption in March and April, particularly around rates and product availability, although landlords are still seeking funding and advice.

Landlords want BTL consistency

The lender’s sales and distribution director, Rob Stanton, said: “What comes through very clearly is landlords remain active and engaged with the market, but they are placing much greater value on certainty, consistency and communication from lenders and advisers.

“While rates remain incredibly important, landlords also want confidence that products will remain available, that cases will progress smoothly and they can rely on lenders to support them through periods of market volatility.”

He added: “It is also very telling that almost half of respondents have either completed or are currently progressing a mortgage despite the recent instability.

“Activity is still very much there, and advisers continue to play an incredibly important role in helping landlord borrowers navigate changing market conditions.”

Confidence accessing buy to let

Recent market conditions have already changed landlord behaviour for 35.3% who said they had reduced activity because of global events and rate movements.

Another 21.8% said they had delayed plans altogether.

Confidence has also taken a hit with 49.6%, said their confidence in accessing buy to let finance had worsened in recent months.

However, 45.1% said their confidence had remained unchanged, with Landbay saying landlords still appear to regard funding as available, even in a more unsettled market.

BTL availability is improving

Product choice remains a concern as 57.9%, describe current BTL product availability as ‘limited’, while 24.8% said it was ‘very limited’.

Landbay said availability had begun to improve in recent weeks, with lenders reintroducing products and pricing becoming more stable after the earlier spring disruption.

Landlord activity has continued despite the turbulence and almost half said they had either completed a BTL mortgage in the last month.

The survey found competitive pricing still matters most to landlords, with 66.2% naming rates as their key priority.

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