Why guarantor agreements are under government scrutiny
Guarantor agreements sit in the blind spot of most tenancy law. A tenant signs an assured tenancy governed by the Housing Act 1988; the guarantor signs a separate contract governed by ordinary contract law. That split has allowed landlords and letting agents to write guarantor terms that would be unenforceable, or outright unlawful, if they appeared in the tenancy itself. The Ministry of Housing, Communities and Local Government (MHCLG) has been examining exactly this gap, and its findings are expected to feed into guidance and secondary legislation as the Renters' Rights Act 2025 provisions come into force through 2026.
The review focuses on three areas: guarantor agreements that run beyond a fixed term, clauses that make guarantors liable for rent arrears without notice, and the practice of requiring guarantors from tenants who pose no additional credit risk. Each interacts directly with the abolition of fixed-term tenancies under the Renters' Rights Act, which converts all new tenancies to periodic agreements from the implementation date.
What the review covers
MHCLG's work on guarantors forms part of a wider post-implementation review of tenancy reform. The core questions are straightforward:
- Should a guarantor agreement automatically expire when a tenancy ends, or can it survive a statutory periodic tenancy created by operation of law?
- Can a guarantor be held liable for rent that accrues after the tenant has given notice, when the landlord has refused that notice under new possession rules?
- Should guarantor liability be capped, as it is in many student lettings, and should caps be standardised?
- Do guarantor requirements discriminate indirectly against younger renters, benefit claimants and tenants without family in the UK, contrary to the Equality Act 2010?
The last point matters for agents operating HMOs and student portfolios. Universities and purpose-built student accommodation providers typically cap guarantor liability at 12 months of rent. Private landlords frequently demand unlimited joint and several liability from a guarantor who may be a retired parent on a pension. The review is expected to recommend a model guarantor agreement, similar in spirit to the model tenancy agreement MHCLG published in 2020, which landlords would be encouraged rather than compelled to adopt.
How the Renters' Rights Act changes the guarantor picture
The Renters' Rights Act 2025 abolishes Section 21 and fixed-term tenancies for new lets. From the commencement date, every new tenancy is periodic and can only be ended by the tenant on two months' notice or by the landlord on specified grounds, including Ground 1 (moving in or selling), Ground 1A (sale by a prior landlord) and mandatory rent arrears grounds. This creates a technical problem for guarantor agreements drafted before the Act.
Most standard guarantor agreements define liability by reference to the fixed term. With no fixed term, clauses that purport to guarantee "the term" are ambiguous. Landlords who continue using pre-reform templates risk guarantors arguing that their liability ended when the original term would have expired, or that they cannot be pursued for arrears accruing during a notice period they were never told about. The government review is expected to clarify that guarantor liability should track the tenancy itself, ending when the tenancy ends, with a defined tail period for arrears that accrued during the tenancy.
There is also the question of rent increases. Under the Act, landlords can raise rent once a year to market rate using the Section 13 procedure, and tenants can challenge the increase at the First-tier Tribunal. Guarantors are increasingly being asked to guarantee "the rent as varied from time to time". The review is examining whether guarantors should receive notice of any rent increase and an opportunity to release themselves from the guarantee rather than absorbing uncapped increases they never agreed to.
Common guarantor clauses that will not survive 2026
Landlords and agents reviewing their paperwork should flag the following clauses now, because they are the ones most likely to be challenged or rendered ineffective:
- Indefinite liability. Clauses stating the guarantee continues "until released in writing by the landlord" conflict with the periodic tenancy structure and the expected model terms.
- Liability for post-tenancy arrears without limit. Guarantors who receive no notice when a tenant falls into arrears have a strong argument under contract law that the landlord breached an implied duty, particularly where the tenancy agreement obliges the landlord to serve arrears notices.
- Guarantees on statutory periodic tenancies. Where a fixed term expires and the tenancy continues by statute, some guarantor agreements lapse. Agents should check whether their template expressly covers this, though the fixed term itself is disappearing for new lets.
- Blanket guarantor requirements. Requiring a guarantor from every applicant regardless of income or credit result is harder to justify than a policy triggered by defined criteria, such as income below a set multiple of rent or adverse credit checks. Blanket policies increase exposure to indirect discrimination claims under the Equality Act 2010.
Practical steps for landlords and letting agents
The review has not yet produced binding rules, so the work now is preparation rather than compliance. Start with your documents. Pull every guarantor agreement in use across your portfolio or branch network and check three things: how liability is defined, how it ends, and what notice the guarantor receives. If your template references a fixed term, it needs rewriting before you let to any new tenant under the periodic regime.
Second, document your guarantor policy. Write down the criteria that trigger a guarantor requirement, apply them consistently, and record the reasoning for each applicant. If a rejected applicant alleges discrimination, a written, consistently applied policy is your defence. Trading Standards officers, who enforce the Tenant Fees Act 2019 and will enforce parts of the Renters' Rights Act, take a dim view of terms applied inconsistently.
Third, review how you communicate with guarantors. Send arrears notices to guarantors at the same time as tenants, confirm in writing when a guarantee ends, and give guarantors a copy of any rent increase notice served under Section 13. These habits cost little and remove the arguments guarantors currently use to escape liability.
Fourth, tighten your move-in records. A guarantor dispute usually turns on what was agreed and when. A dated, signed inventory with photographic evidence of the property's condition, plus a clear record of the guarantor agreement signed at the same time, gives you the evidential chain you need if you ever pursue a guarantor for dilapidations or arrears. Many agencies now run this process through property inventory software that timestamps check-ins, stores guarantor documents against the tenancy record and flags when a guarantee is due to expire, which is far easier than reconstructing paperwork from email threads two years later.
What student and HMO landlords should watch
Student lettings operate on a different rhythm. Tenancies start in July or August, guarantors are signed months earlier, and most providers already cap liability. The government review is expected to look at whether the private rented sector should converge on the student model, where a guarantor covers a defined period and a defined sum. If you let to students, check whether your guarantor agreements cap liability at the rent for the tenancy period. If they do not, you are out of step with the market norm and exposed if the review's recommendations harden into guidance or law.
HMO landlords face an additional wrinkle: joint and several tenancies. Where several tenants share one tenancy, the guarantor is typically guaranteeing all tenants' obligations. If one tenant leaves and is replaced, does the original guarantor remain liable for the replacement's arrears? Most agreements say yes; the review is questioning whether that is fair, and some guarantors have successfully argued that a material change in the tenancy parties discharges the original guarantee. Agents managing HMOs should add a clause dealing expressly with tenant replacement, or obtain a fresh guarantee each time the composition of a household changes.
Timeline and what to do next
The Renters' Rights Act received Royal Assent in October 2025, with its main provisions commencing in stages through 2026. MHCLG has signalled that guidance on guarantor agreements will accompany the implementation programme rather than trail it, so landlords should expect clarity on model terms during 2026 rather than after. ARLA Propertymark and the NRLA are both updating their member templates in response, and members should watch for revised documents from those bodies.
Until the guidance lands, the sensible position is to assume guarantor liability will be expected to end with the tenancy, that guarantors will be entitled to notice of arrears and rent increases, and that unlimited guarantees will look increasingly indefensible. Rewrite your templates on that basis, brief your staff, and review your portfolio's existing agreements at renewal. Landlords who wait for the final guidance to act will be rewriting contracts under time pressure; those who start now will simply swap in an updated document at the next let.