"Higher borrowing costs, regulatory reform and longer eviction timelines all change the risk equation. When landlords feel they have less room for error, they look for additional safeguards"
- Riccardo Iannucci-Dawson - Alto
A third of letting agents say more landlords in their portfolio are now requiring guarantors than 12 months ago, according to new research pointing to a tightening of tenant criteria across the UK private rented sector.
The findings come from the Alto 2026 Agency Trends Report, which surveyed 250 estate and lettings professionals across the UK. Alto provides one of the UK's most widely used CRM platforms for estate and lettings agencies. Of those surveyed, 11% reported a significant rise in guarantor demands, suggesting the shift is meaningful for a substantial minority of landlords rather than a fringe trend.
Risk concerns and regulatory change reshaping tenant criteria
The backdrop is a combination of rising mortgage costs, persistent affordability pressures, and the forthcoming Renters' Rights Act, which will remove Section 21 no-fault evictions and strengthen tenant protections. Together, these factors are changing how landlords calculate risk at the point of agreeing a tenancy.
"Landlords are nervous, and that's feeding through into stricter tenant requirements," said Riccardo Iannucci-Dawson, chief executive of Alto. "Higher borrowing costs, regulatory reform and longer eviction timelines all change the risk equation. When landlords feel they have less room for error, they look for additional safeguards."
Government figures show landlord possession claims remain elevated compared to pre-pandemic levels, while cost-of-living pressures continue to affect tenants' ability to meet rental payments.
Average rents across the UK have also risen sharply over the past two years, deepening affordability challenges in many regions. Against that backdrop, guarantors are increasingly being used as a financial buffer, particularly where affordability is marginal or tenant profiles carry greater uncertainty.
What this means for letting agents
For agencies, the practical consequences are significant. More guarantor requirements mean more referencing, more documentation and more compliance checks, all of which add friction to pre-tenancy processes if workflows are not properly structured.
"Guarantors are increasingly seen as a financial safety net," Iannucci-Dawson added. "But this also adds complexity for agents. More referencing, more paperwork, more compliance checks and more room for friction if processes aren't streamlined."
Alto argues that agencies will need tighter, faster pre-tenancy workflows to absorb the additional demand efficiently, particularly as regulatory requirements intensify under the new legislation.
"When risk rises, admin rises," he said. "The agencies that can manage guarantor checks, affordability assessments and documentation seamlessly will protect both landlords and tenants without slowing deals down."
What happens next for the lettings market
With the Renters' Rights Act about to come into effect in the next few weeks, the pressure on landlords to tighten tenant selection is unlikely to ease in the near term. As possession becomes more complex and time-consuming, the use of guarantors as a risk management tool looks set to become more common rather than less.
Agencies that build efficient compliance and referencing processes now may be better placed to handle the operational load once the legislation takes effect.
