Housing Hand, a rental guarantor service provider, has said that it has experienced a huge surge in demand following the increasing challenges faced by private landlords and tenants in recent months.

Over the past six months, applications for rental guarantor services have seen a significant 50% increase.

The company is also steadily adding 200 new accommodation partners each quarter, indicating a robust growth trajectory.

Despite its established presence and decade-long tenure in the UK and Irish markets, the current growth spurt mirrors patterns typically observed in smaller start-ups.

This can be attributed to the challenging economic climate and rising rents, prompting more tenants to seek rent guarantors to secure their desired accommodations.

However, as a larger number of individuals fail to meet the necessary criteria to serve as a guarantor (with only approximately 25% passing), referencing companies are seeking additional assurances, leading to further demand for rental guarantor services.

Graham Hayward, Chief Operating Officer at Housing Hand, stated, "Many people assume that needing a guarantor is limited to students with limited or no credit history. However, in today's market, working professionals are increasingly required to provide a guarantor to secure their tenancies, resulting in a surge in applications for guarantors. We have embraced this challenge by collaborating with our expanding partner network while enhancing our technology to accommodate the growing demand."

Interest rate hikes and the ongoing withdrawal of landlords from the private rental sector are driving up rents in the UK.

Home reports indicate an 11.4% rise in rents across the UK in the past year, with Foxtons noting a 13% increase in London, primarily driven by an 18% rise in East London since May 2022.

The continuous increase in interest rates has become a breaking point for many landlords, who have experienced declining profitability from private tenancies for years.

Zoopla reports that 11% of homes currently for sale were previously rental properties, indicating a significant exodus from the private rental sector. In most regions, the number of available rental homes is now 20-40% lower than pre-pandemic levels.

James Maguire, Head of Sales and Business Development at Housing Hand, added, "As demand continues to outpace supply, along with rising interest rates and inflation affecting many private landlords, we are working closely with our student accommodation providers and Build to Rent partners. By utilizing a guarantor company, these businesses can reduce the cost of onboarding new tenants and mitigate the risks associated with tenant defaults and the administrative burden of recovering unpaid rent."

In summary, Housing Hand is witnessing a considerable surge in demand for rental guarantor services due to the current economic climate, rising rents, and the growing difficulty individuals face in qualifying as guarantors. As interest rates rise and landlords exit the private rental sector, rents continue to climb. Housing Hand aims to assist tenants and landlords in navigating these challenges by forging strategic partnerships and implementing technological advancements. By providing reliable solutions, the company seeks to alleviate the financial burdens and risks associated with renting in a constantly evolving landscape.