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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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Insurance for Landlords: What’s Covered & Where Guaranteed Rent Fits In

For landlords, protecting rental income and property conditions is essential. While landlord insurance plays a major role in safeguarding against risk, many property owners assume it covers more than it actually does. That gap between expectations and reality is often where guaranteed rent becomes a valuable solution. What Landlord Insurance Typically Covers Landlord insurance is designed to protect you financially against events that could damage your property or disrupt your income. Although policies vary, many include: Buildings and contents cover – protection if the structure or landlord-provided furnishings are damaged Legal expenses – support with legal action against tenants in certain situations Public liability cover – protection if a tenant or visitor is injured due to property faults Loss of rent (in limited scenarios) – usually only if the property becomes uninhabitable after an insured event like a fire or flood These are important safeguards, but they only apply to specific situations. Many landlords are surprised to find that their policy doesn’t guarantee rental payments if their tenant stops paying. What Insurance Often Doesn’t Cover This is where misunderstandings happen. Common exclusions include: Rent arrears if the tenant refuses or cannot pay Void periods between tenancies Damage caused by tenants in some cases, unless you’ve added malicious damage cover Eviction delays and income loss during court proceedings Some insurers offer rent guarantee insurance, but it is usually an optional add-on. Even then, landlords often encounter excesses, claim delays, and strict requirements that make it harder to secure reimbursement. Where Guaranteed Rent Fits In Instead of relying on tenants to pay on time or chasing arrears, many landlords now choose guaranteed rent for landlords, which provides a fixed, reliable rental payment every month. Instead of hoping a policy covers income disruption, landlords receive rent whether the tenant pays or not, and often even during void periods. A guaranteed rent provider, such as Sparemove, typically: Pays landlords a fixed monthly rent Takes responsibility for finding and managing tenants Covers rent arrears, voids, and sometimes damage Handles inspections, compliance and reporting Provides a fully hands-off experience The Bottom Line for Landlords Landlord insurance is still an important layer of protection, but it doesn’t replace rental income if tenants default. Guaranteed rent fills that gap, offering stability and peace of mind in a rental market where legislation, mortgage rates, and tenant affordability are changing rapidly. For landlords who want a predictable and passive rental experience, guaranteed rent offers something insurance alone cannot: certainty.

What Councils Look for When Approving Properties for Temporary Accommodation

With demand for temporary accommodation rising across London, many landlords are exploring guaranteed rent schemes that lease properties directly to councils. It provides a reliable income while supporting housing needs in the community. But before a property can be approved, councils have strict standards you must meet. Property Standards and General Condition Councils are responsible for placing vulnerable households, so properties must be safe, secure and in good repair. Most councils look for: Modern, well-maintained interiors No damp, mould, leaks, or structural defects Secure doors and windows with proper locks Heating, hot water and ventilation systems in good working order Clean, hygienic kitchens and bathrooms A property doesn’t have to be luxury, but it must be comfortable, functional, and easy to maintain. Safety and Compliance Checks Before a council leasing agreement can begin, landlords must provide evidence of statutory safety checks, including: Gas Safety Certificate (CP12) Electrical Installation Condition Report (EICR) EPC certificate, usually E or higher Smoke alarms and carbon monoxide alarms fitted and tested Fire safety equipment where required (e.g., fire blankets) Councils may also inspect for trip hazards, window restrictors on higher floors, and correct escape routes. Ideal Layouts for Temporary Accommodation While a range of properties can qualify, councils generally prefer: Self-contained units with private kitchens and bathrooms Practical layouts suited to families or single households Durable, easy-to-clean flooring and surfaces Adequate storage and space for essential furniture Studio flats, 1–3 bedroom homes, and HMOs may all be used depending on local demand. Turnaround Times & Readiness Landlords benefit when properties are ready to occupy quickly. Councils look for homes that need minimal work so tenants can move in without delay. Guaranteed rent providers often help with this process, ensuring compliance and organising any final preparations. Final Thoughts For landlords seeking steady income and long-term security, working with councils through a guaranteed rent scheme can be a highly reliable strategy. Meeting property standards is straightforward with the right guidance, and once approved, landlords enjoy fixed payments, no voids, and fully managed tenancies.

Avoiding Hidden Fees When Signing a Guaranteed Rent Contract

Guaranteed rent is an excellent solution for landlords seeking stable, predictable income without the stress of tenant management. However, not all guaranteed rent agreements are created equal. Some contracts include hidden fees or unexpected charges that can reduce the effective rental income you receive. Understanding what to look out for is key to protecting your investment and ensuring your income remains secure. Common Hidden Fees in Guaranteed Rent Contracts Even experienced landlords can overlook clauses that result in additional costs. The most common hidden fees include: Management Fees: Some providers deduct extra fees for handling routine management tasks. While management services are valuable, excessive or poorly disclosed charges can eat into your rental income. Maintenance Charges: Certain contracts place the responsibility for minor repairs on landlords, which can become costly over time. Exit Fees: Early termination penalties are sometimes applied if you want to leave the agreement before the contract ends. Renewal or Extension Fees: Extending a guaranteed rent agreement can occasionally involve fees that reduce your overall income. How to Protect Yourself To avoid being caught off guard, landlords should take a careful, proactive approach when reviewing contracts: Read Every Clause Thoroughly: Hidden fees are often buried in the fine print. Make sure you understand every element of the contract before signing. Ask Questions: Clarify any points that are unclear or seem unfair. Reputable providers like Sparemove will explain their terms transparently. Choose a Transparent Provider: Look for companies that offer no commission and guarantee market-level rent, so your income isn’t diminished by unnecessary fees. Get Everything in Writing: Verbal assurances don’t protect you; always ensure your agreement reflects exactly what has been promised. Why Working with Sparemove Makes a Difference Sparemove’s guaranteed rent schemes are designed to be completely transparent. We charge zero commission, include no hidden fees, and guarantee your rent on time, every month. Our contracts are straightforward and landlord-friendly, meaning you know exactly what to expect from day one. Conclusion Guaranteed rent can be a powerful tool for landlords, but only if the terms are clear and fair. By understanding potential hidden fees and working with a trusted provider like Sparemove, you can enjoy a stress-free, hands-off income stream without worrying about deductions or unexpected costs. Always prioritise transparency and peace of mind, your property deserves nothing less.

How Location Impacts Guaranteed Rent Opportunities

When it comes to guaranteed rent, the location of your property can significantly affect both demand and rental income.While guaranteed rent schemes provide landlords with reliable monthly income, the strength of that guarantee often depends on how desirable the area is for tenants. Choosing the right location can make your property easier to let, attract better tenants, and maximise returns.Why Location MattersGuaranteed rent relies on a strong rental market. Providers like Sparemove guarantee your income by letting your property to reliable tenants, but they also need to ensure consistent occupancy. Areas with high demand, excellent transport links, reputable schools, and local amenities make this process much easier. Properties in prime locations are often easier to let, attract longer-term tenants, and are more likely to maintain or increase their rental value over time.In South London, suburbs such as Dulwich, East Dulwich, Bermondsey, and Wallington are ideal examples. These areas combine excellent transport options with vibrant local communities, parks, shopping, and dining options. For instance, Dulwich offers leafy streets and top schools, making it particularly appealing for families, while Bermondsey and Bankside attract young professionals seeking riverside living close to central London.Key Factors That Influence Guaranteed RentTransport Links: Proximity to train or underground stations can greatly enhance demand. Easy commuting options attract professional tenants.Local Amenities: Cafes, shops, green spaces, gyms, and restaurants all make a property more attractive.Community and Safety: Well-maintained neighbourhoods with strong community ties and low crime rates are preferred by tenants.Property Type and Quality: Modern flats, renovated period homes, or well-kept houses typically command higher rents and longer tenancies.Maximising Your Guaranteed Rent PotentialBy selecting a property in a high-demand location, landlords can increase the likelihood of achieving competitive market rents while benefiting from the security of a guaranteed rent scheme. Working with a trusted provider like Sparemove ensures you receive market-level rent, professional management, and consistent income, no matter what.Location doesn’t just affect the rent; it also affects tenant stability, long-term property value, and the ease with which providers can guarantee your payments. When planning your next property investment, focus on areas with strong rental demand, great amenities, and excellent transport connections to secure maximum returns and peace of mind.

Sparemove

Sparemove is an estate agency which specialises in every aspect of the property market. Whether you are buying, selling or renting, we provide a fantastic service with outstanding quality. Our core values of honesty, commitment and integrity are key to our success.

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+442033756161

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