Strong demand in the rental market has allowed landlords to ask for guarantors for 56% of properties let by ludlowthompson in August. The lettings agent state that guarantors are most often used when a tenant does not have a 3-6 month record of income, even if they are well paid with excellent employment prospects and have an excellent credit history.

The company recently let a property to two tenants embarking on graduate jobs at Top 20 law firms, both earning in excess of £30,000. Both provided parental guarantors, as they had not yet built up enough of an income track record and wished to bolster their application to secure their chosen property.

Stephen Ludlow, Director of ludlowthompson, said: "The rental market in London continues to be very strong during the peak summer months, with recent graduates flocking to the capital and its suburbs to start work. This high demand is allowing landlords to ask for extra assurances, such as rental guarantors. Young professionals with rental guarantors are particularly desirable tenants for landlords, as they have both good income to pay the rent, and the reassurance of their parents to back them up, should they be unlucky enough to lose their jobs."

The use of parental guarantors is a trend that was initially influenced by the student lettings market and Ludlow added: "Parental guarantors have been in use in student rentals for a number of years, and have become an accepted feature of the market.

“Parents are used to acting as guarantors for their children during their time at university, so continuing for another year after graduation is something they are often comfortable with. There are other options, however.
“Another way landlords can obtain additional assurances is for tenants or their parents to pay a period of rent, usually six months, in advance. This may be a good compromise solution in some situations, as not all parents are willing involve themselves legally with the tenancy by acting as a guarantor.

“Paying rent in advance is also a popular option for international students and young overseas tenants as it is often more practical for them than obtaining a parental guarantor from outside the UK."

The lettings agency states that its increasing use of rental guarantors ensures that its rent arrears levels remain low and stood at just 4.5% in July, which they say, is less than half the UK average of 9.2%.