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Guaranteed Rent 101: The Hassle Free Rental Scheme

Posted in Mar 06 , 2025

As a landlord or property owner, managing a rental can be overwhelming.

From finding tenants to keeping on top of certificates and licenses, there's so much to think about. Add to that the unpredictability of the rental market, and creeping mortgage rates, and it's easy to see where the headaches come from.

That's why many landlords across the capital turn to letting agents. For a fee, the letting agent takes on these responsibilities, leaving landlords time to focus on enjoying the rental income.

However, there's on particular scheme that's even better than traditional letting contracts. That scheme is gauranteed rent.

Guaranteed rent offers landlord's consistent rental income, with 0 management responsibilities. In this article, we're going to talk through the guaranteed rent scheme, including pros and cons, helping you decide whether this is the right rent scheme for you.

What is a Guaranteed Rent Scheme?

Guaranteed rent is a specific service offered by letting agencies/rental companies.

The letting agents rents your property off of you for a fixed amount each month. They then sublet your property to the tenant/tenants that will live there.

Basically, the company becomes your tenant. This means the company is responsible for the rent. They're also responsible for all the day-to-day management operations, such as:

. Maintenance issues
. Energy performance certificates
. Tenant vetting
. Tenant management

Types of Guaranteed Rent

There are a few types of guaranteed rent schemes, and it's important for you to know the difference.

Council-backed Guaranteed Rent

Council-backed guaranteed rent is a scheme that offers landlords the chance to let their properties to the council, in exchange for a fixed monthly sum. Often, the property is let out to tenants who require social housing. Numerous London Boroughs offer council-backed guaranteed rent, including Barnet, Ealing and Barking & Dagenham.

Letting Agent Guaranteed Rent

Letting agent guaranteed rent schemes work in much the same way, but a professional letting agency will manage the property. They may place private renters into your property, or they might also work with local councils to place tenants.

Rent Guarantee Insurance

This often gets confused with guaranteed rent, but it's actually a different service all together. Rent guarantee insurance is offered by private insurance firms. You will pay a set amount per month or year to the insurance company, and then if your tenant defaults/misses a rent payment, the insurance will cover you. This insurance is great for your peace of mind and financial security.

What Are the Pros of Guaranteed Rent?

The main, and most attractive, benefit of guaranteed rent, is guaranteed monthly income. Because the council/letting agents are technically your tenant, they are responsible for the rent every month. Even if the tenant misses a payment or ends up in rent arrears. For most landlords, this opportunity is music to their ears.

There are also several other benefits to guaranteed rent...

. Hassle-free management: The letting agents/council will take care of all management aspects, such as tenant sourcing, vetting and maintenance issues. You can enjoy hands-off income.
. Lower-risk: Because the letting agents/council take on the responsibility of the contract, they're also responsible for damage. Your property will be returned to you in the same state it was taken on in, save for fair wear and tear.
. Long-term stability: Contracts are usually from 1 to 5 years. This means you can dip your toe in for a trial period, or commit to 60 months of fixed monthly rental income.

What Are the Cons of Guaranteed Rent?

As with any rental scheme or contract, there are some downsides to guaranteed rent. It's important for you to know what these are, too. This will help you make an informed decision.

. Reduced control: Whilst this might be attractive for some landlords, it's not for everyone. You'll have limited involvement in selectiong the right tenants, and in checking up on them. This can put some landlords off!
. Lower rent: Some guaranteed rent providers will offer slightly lower rental prices. This is to allow them to break even, should a tenant default. It's worth knowing that not every guaranteed rent provider will do this. At Sparemove, we can offer market-value rent.

Guaranteed Rent: The Process

The process of letting out your UK property via guaranteed rent is relatively simple.

1. Contact a guaranteed rent provider, such as Sparemove estate agents.
2. We'll conduct a property valuation/inspection, checking your property is suitable for guaranteed rent.
3. We'll let you know the monthly rent we can offer you, which will be very close to market value rent!
4. If you're happy to proceed, we'll draw up the contracts.
5. Then, we'll place the third party in your property, dealing with everything from viewings to vetting and references.
6. The new tenant will be looked after by our team of experts. We'll handle any maintenance, repairs and minor issues.
7. At the end of the contract, you'll get your property back in a similar condition, save for fair wear and tear.

Why You Should Choose Sparemove for Guaranteed Rent

Choose Sparemove and you will have a trusted agency on your side. We are proud of our reputation as a professional estate agency with a result driven and customer focused approach. We offer excellent service to every one of our clients, whether they are buying, selling, letting or renting.

Our core valies of honesty, commitment and integrity guide us on everything we do. We live and breathe these values through our customer focused approach, to ensure each client’s individual needs are met.

Our dedicated staff at Sparemove have exceptional knowledge of the local area and a real understanding of current property market trends with a strong network in London and Essex.

We do business in a unique way to give our clients the edge.

Our Accreditations

We always strive for the best possible service, so we are accreditted with several organisations:

. Safeagent
. The Property Ombudsman
. Deposit Protection Service

Want to Know More?

If you want to know more about this scheme, and whether it's the right solution for your property portfolio, our team would be happy to tell you more. Alternatively, if you're just curious about what fixed rental income your property could achieve, use our no-obligation valuation tool to get an idea.

Frequently Asked Questions

What is the maximum length of contract for guaranteed rent?

Usually, 5 years will be the maximum guaranteed rent contract length. Though the length of the contract can be negotiated with the provider.

Is the guaranteed rent scheme worth it for landlords?

We might be biased, but we think the guaranteed rent scheme is absolutely worth it for landlords. Two of the biggest concerns for landlords are missed rental payments and tricky tenants.

Guaranteed rent addresses both of these concerns. The rental income is guaranteed every month, and, the rental property is managed by the guaranteed rent company for the duration of the contract. There's minimal hassle for landlords.

What are the benefits of guaranteed rent for landlords?

Being a guaranteed rent landlord guarantees you fixed monthly rental income. That means no void periods, no rent areears and no missed payments. There are also no hidden fees or commissions, the rent amount that we agree with you is the exact amount that's transferred into your bank account, every month.

How much does guaranteed rent cost?

That's a tricky one as it varies so much from provider to provider. Some companies might charge commission or management fees, whilst others will offer you lower rent to cover their own costs.

At Sparemove, we do neither of these things. We can offer you close to market value rent, and there are no hidden fees or commissions.

What other services do you offer?

As well as guaranteed rent London, we offer a range of traditional estate agency services. This includes sales and traditional lettings.

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