Rent Guarantee in a changing rental market: what letting agents need to know

Section 21 notices have been abolished, the mandatory threshold for eviction has increased from 2 to 3 months’ rent arrears, and the notice period landlords must give tenants has doubled from 2 weeks to 4 weeks.

In practice, this means a tenant could be in 4 months’ rent arrears before any action to gain possession under the mandatory rent arrears ground can begin. For letting agents, this represents major operational and financial risk across your managed portfolio.

Landlords are relying on letting agents to help them navigate this new reality. Rent Guarantee is now a very important consideration.

What the Renters’ Rights Act means for letting agents

As evictions become more complex and costly, the risk of prolonged rental arrears and escalating legal expenses rises sharply. Without robust protection in place, landlords face:

• Months of unpaid rent before they can start possession proceedings
• Increased legal complexity and stricter documentation and deadline requirements
• Greater exposure to regional court delays and bailiff backlogs

For your agency, this translates into:

• More time spent managing arrears, notices and court processes
• Higher levels of landlord stress and potential loss of clients
• Greater pressure on your team to deliver solutions in a difficult environment

Rent Guarantee gives you a practical, deliverable answer to these challenges.

The real cost of rent arrears and eviction

If a landlord does not have Rent Guarantee in place, they must personally absorb the legal costs and loss of income when a tenant stops paying rent and refuses to leave.

Typical legal costs across the process include:

Stage 1 - Serving Notice

• Section 8 Notice (rent arrears): around £300
• Section 8 Notice (other grounds): around £384
• Guarantor Letter of Claim: around £240

Stage 2 - Legal Proceedings

• Possession proceedings - accelerated: around £1,100
• Possession proceedings (Section 8 & rent arrears only): around £1,228

These figures usually include attendance at a first hearing, but if further hearings are needed, or the case is defended or becomes more complex, additional fees apply.

Stage 3 - Enforcement

If tenants fail to vacate in line with a possession order, enforcement costs add further strain:

• County Court bailiff: around £328
• Transfer to High Court: around £279*
• Postponement of eviction: around £396

Taken together, it can easily cost £2,000-£3,000 in legal fees to evict a tenant who has stopped paying rent - before you even factor in the lost rental income.

For your landlords, this is a significant financial shock. For your agency, it’s a key risk point where you either provide a solution or risk losing the relationship.

Court delays: a growing operational risk

The Renters' Rights Act was implemented without pausing for court reforms, and existing bottlenecks are already well known:

• Backlogs and long waits to get to a hearing
• A national bailiff shortage, with around 300 county court bailiffs across England and Wales
• The abolition of “no-fault” Section 21 evictions adding further pressure to an overburdened system

Recent CourtWatch data from HomeLet and Let Alliance highlights the impact:

• Average loss per claim: £8,684
• Highest reported loss: £27,436
• Median loss: £7,725
• Even the lowest cases: £4,312

The ten worst-hit areas for rental loss are mostly in London and the South East, where losses per case can run into the tens of thousands. In some courts, delays now average 7 months or more.

Every month of delay increases arrears for your landlords and adds to the workload and pressure on your agency.

How Rent Guarantee protects your landlords - and your agency

Rent Guarantee is designed to tackle both the financial and practical risks of rent arrears and eviction.

For your landlords, Rent Guarantee can:

• Ensure rent is paid even if tenants default (subject to policy terms)
• Cover professional legal costs associated with repossession
• Streamline the legal process and reduce stress

For your agency, Rent Guarantee:

• Strengthens your value proposition to landlords in a tougher market
• Reduces the financial shock when things go wrong, helping retain clients
• Shifts complex legal administration and strict court deadlines away from your team and onto specialist providers

In a changing legislative landscape, Rent Guarantee isn’t just an “add-on” - it’s a core safeguard that reinforces your managed service and helps futureproof your portfolio.

Positioning Rent Guarantee as a core service

As a letting agent, you’re in a unique position to educate landlords on the risks and the protection available. Practical ways to build Rent Guarantee into your proposition include:

• At instruction and renewal
  Make Rent Guarantee a standard part of your managed offering, not an afterthought. Present the service alongside referencing, compliance, and deposit protection.
• Using real-world figures
  Share typical legal costs (£2,000-£3,000 per eviction) and average claim losses (£8,684), as well as examples of regional delays. Concrete numbers make the risk tangible.
• Framing it as risk management
  Position Rent Guarantee as a way for landlords to stabilise income and protect themselves from extended arrears and court uncertainty.
• Emphasising your support
  Highlight that with Rent Guarantee in place, your agency and its partners will manage notices, complex legal documentation, and court timelines on their behalf.

Working with HomeLet and Let Alliance

HomeLet and Let Alliance are leading providers of tenant referencing and Rent Guarantee services. As a letting agent, you can arrange Rent Guarantee on a policy held in your agency’s name:

• Your agency is the policyholder and handles administration
• Your landlord has an “interest” in the policy because it’s designed to protect their rental income
• If a valid claim is made (for example, for rent arrears), the benefit of the policy is for the property and the landlord’s rental income

Full terms apply, and an “Acknowledgement of Interest” will be issued. It’s important to review this to ensure the service meets your agency’s and your landlords’ needs.

Can you afford not to offer Rent Guarantee?

In the post-Section 21 environment, the combination of longer arrears thresholds, extended notice periods, rising legal costs, and growing court delays creates a challenging backdrop for every letting agency.

Rent Guarantee gives you a structured way to:

• Protect your landlords’ income
• Reduce operational and legal complexity
• Differentiate your agency in a competitive market

Now is the time to review how you position Rent Guarantee within your service offering and ensure every landlord understands the value of having this protection in place.