What Is a Guaranteed Rent Scheme?

A guaranteed rent scheme is an arrangement where a landlord receives a fixed monthly rent for an agreed term whether the property is occupied or not. The organisation taking the property carries the risk of voids, arrears and management, and the landlord receives the same figure on the same date every month.

The term describes an outcome rather than a structure. Several different arrangements produce a guaranteed rent, and they are not equivalent. What matters to a landlord is not the label but who is standing behind the guarantee, because that determines whether it holds when something goes wrong.

RentPromise delivers a guaranteed rent through a lease granted directly to a local authority, housing association or the Home Office. That is a materially different position from a scheme where a private company is the tenant, and the difference is explained in full further down this page.

How RentPromise Delivers a Guaranteed Rent

You grant a lease directly to a local authority, housing association or the Home Office. That organisation pays your rent for the full term and is responsible for repairs and the condition of the property. RentPromise acts as your agent, arranging the lease and managing the arrangement throughout.

The guarantee comes from who holds the lease. Your agreement is with a public body carrying a statutory housing duty, not with a private company whose ability to pay depends on how its business is trading. That is the whole basis of the arrangement and the reason it holds regardless of occupancy.

RentPromise is not a party to the lease. We source and match your property, negotiate the terms on your behalf, handle the rent payments so they reach you on one date each month, and manage the arrangement until the property comes back to you.

One consequence is worth stating plainly. If RentPromise ceased trading tomorrow, your lease would still stand and the government body would still owe you the rent for the remainder of the term. Your income does not depend on us continuing to exist, which is not true of every guaranteed rent arrangement on the market.

Read how government property leasing works in full

Not All Guaranteed Rent Is the Same

Two arrangements are commonly marketed as guaranteed rent, and they carry very different risk for a landlord. In one, a private company leases your property and sublets it. In the other, you lease directly to a public body. The monthly figure may look similar. What sits behind it does not.

Who holds your lease

A private company

A local authority, housing association or the Home Office

Who owes you rent

That company

That public body

What backs the guarantee

The company’s trading position

A statutory housing duty and public funding

Who occupies the property

Occupants the company finds and sublets to

Households the body places under its duty

Repairs and condition

The company, at its discretion and cost

The government body, under the lease

If the counterparty fails

Your income stops and you may need to recover the property

A public body does not cease trading

This is not an argument that every rent-to-rent operator is bad. Many are competent and pay reliably. It is an argument that the guarantee is only ever as good as the organisation giving it, and that a landlord should look at the counterparty rather than the promise.

Why the distinction matters over five years

A one-year commitment to a private company is a modest risk. A five-year one is not. Businesses change hands, lose contracts and close, and a landlord three years into a lease with a company that has stopped paying is in a difficult position with limited options.

What to ask any provider

Who exactly will be named as the tenant on my lease?
What happens to my rent if that organisation stops trading?
Who is responsible for repairs and the condition of the property?
Who chooses the occupants, and what agreement do they hold?

Ask us those questions too. The answers are on this website, and if anything is unclear we would rather explain it now than have you find out later.

What Is Guaranteed, and What Is Not

The guarantee covers your rent for the term of the lease. It does not cover every cost associated with owning a property, and no arrangement of this kind does. Being clear about the boundary is more useful than a general assurance that everything is taken care of.

Guaranteed

Your rent, on the same date every month
Payment whether occupied or empty
Payment if an occupant does not pay
No deduction for repairs during the term
No commission taken from your rent
Vacant possession at the end of the term

Not guaranteed

That your mortgage rate will not change
That your buildings insurance will not rise
That service charges will not increase
The highest possible market rent
That the property will not age during the term
Recovery of the property before the term ends

The right-hand column is not a list of things that go wrong. It is a list of things outside the lease. Your rent is fixed but your costs are not, and over a five-year term that gap is worth thinking about before you commit rather than afterwards.

Why the guarantee holds when the property is empty

Because the rent is owed under a lease rather than collected from an occupant. The government body is committed to the property for the term whether a household is living in it that month or not, and gaps between placements are absorbed by them. There is no mechanism in the lease for your payment to pause.

What happens if an occupant stops paying

Nothing, as far as you are concerned. Any arrears are a matter between the government body and the household it placed. Your rent is owed by the body under the lease and is unaffected by what the occupant does, which is the practical difference between this and letting privately.

See exactly what is included and who pays for what

What You Give Up in Return

A guaranteed rent is a trade. You are exchanging some potential income and a good deal of control for certainty and for your time back. Whether that is a good trade depends on your property and your circumstances, and it is not the right answer for every landlord.

Some potential income

A guaranteed rent is generally at or near the market rate for a long-term let, not above it. In a strong market a well-run private letting will out-earn it. What the guarantee removes is the downside — the empty months, the arrears, the repair bills — rather than adding to the upside

Choice of occupants

The government body selects and places the households, and you are not consulted. This is the point most landlords weigh hardest, and it is a legitimate reason to decide the arrangement is not for you. It is better established at the enquiry stage than after a lease is signed.

Flexibility during the term

A lease commits you for its term. You can sell during it, but the lease transfers with the property. You cannot recover the property early unless a break clause was agreed before signing, and one cannot be added afterwards.

Is a Guaranteed Rent Scheme Worth It?

It depends on what your property currently costs you in voids, arrears, repairs and time. A landlord with a reliable long-term tenant in a strong area is usually better off as they are. A landlord with recurring voids, an agent taking a percentage, or no appetite for management is usually not.

The comparison that matters

Not gross rent against gross rent, which a private letting will usually win. The useful comparison is what you actually banked over the last three years after every void, every repair bill, every agent fee and every month of chasing, against a fixed figure paid on time for the same period.

A rough way to test it

Take your gross rent over the last three years. Subtract every empty month, every unpaid month, every repair you funded, and every fee you paid an agent. Divide by thirty-six. If the figure that comes out is close to or below what you would be offered here, the arrangement is worth a conversation.

It tends to be worth it if

You are paying an agent a percentage and still handling problems yourself.
You have had voids, arrears or a difficult tenancy in the last few years.
You live some distance from the property, or overseas.
You have several properties and managing them has become a job.
You need predictable income to plan around.

It tends not to be worth it if

You have a reliable long-term tenant and the property looks after itself.
You want a say in who lives in the property.
You may need the property back at short notice.
You are willing to carry the void and arrears risk for a higher gross figure.

Compare your options as a landlord

FAQ

Guaranteed Rent Questions

An arrangement where a landlord receives a fixed monthly rent for an agreed term whether the property is occupied or not. The organisation taking the property carries the risk of voids, arrears and management, and the landlord receives the same figure on the same date every month.

The local authority, housing association or Home Office that holds the lease with you. Your agreement is with a public body carrying a statutory housing duty rather than with a private company. RentPromise acts as your agent and handles the payments, but is not a party to the lease.

No. In a rent-to-rent arrangement a private company leases your property and sublets it, and your rent depends on that company continuing to trade. Here your lease is granted directly to a public body, and RentPromise acts as your agent rather than as your tenant.

Generally at or near the market rate for a long-term let in your area, confirmed in writing after a free survey and valuation. It is a fixed figure for the whole term rather than the highest number the property might achieve in a strong year on the open market.

Yes. Your rent is owed under the lease for its full term regardless of whether anyone is living in the property at any given moment. Gaps between placements are the government body’s concern and do not reduce or delay what you receive.

It depends what voids, arrears, repairs and management currently cost you. Landlords paying an agent a percentage, or dealing with recurring voids, usually gain. Landlords with a reliable long-term tenant in a strong area are often better off as they are.

Find out what your property would be offered

Free survey and valuation, and a written offer setting out the rent, the term and which body would be taking the lease. No obligation at any stage.

Get a Rent Offer

Or call us on (612) 123 - 4456 78 to talk it through first.

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