Looking for Guaranteed Rent? Here's Something Better.
If you want reliable property income, commercial rent guarantees are not your only option. Government-backed payments can be more dependable, but there is a trade-off.
Why Guaranteed Rent Sounds Appealing
If you are searching for guaranteed rent schemes in the UK, you probably want:
- •Reliable monthly income you can count on
- •Protection from void periods and missed payments
- •Someone else to handle the hassle
These are reasonable goals. But commercial rent guarantees often fail to deliver them.
Why Commercial Rent Guarantees Often Fail
The promise of guaranteed rent is appealing in theory. In practice, landlords frequently discover problems:
The Company Goes Bust
Many guaranteed rent operators work on thin margins. When market conditions shift or occupancy drops, they cannot sustain payments. Some reduce rent mid-contract. Others simply stop paying. Your "guarantee" is only as strong as the company behind it.
Rent Below Market Rate
To make a profit, guaranteed rent companies pay you less than the property could earn. Often 10-20% below market rate. You sacrifice income for the illusion of security. If the company fails, you have neither.
Hidden Terms and Poor Management
Unclear exit terms, hidden fees, and inconsistent property management are common complaints. By the time you realise the arrangement is not working, extracting yourself can be difficult.
Rent Guarantee Insurance
Insurance products have their own problems: lengthy claims processes, exclusions that appear at claim time, and premiums that add cost without adding operational support. You are still managing the property yourself.
The core problem: commercial guarantees depend on a company remaining solvent. When conditions change, the guarantee evaporates.
Government-Backed Payments: A Different Source of Reliability
There is an alternative source of income that does not depend on a commercial company staying in business: housing payments funded by the Department for Work and Pensions (DWP) through Universal Credit.
Under the Exempt Accommodation framework, qualifying properties can access enhanced housing element rates that are not capped by Local Housing Allowance (LHA). These payments come from the government, not a private company.
More Reliable Than Commercial Guarantees
The DWP does not go bust. Once a tenant is correctly placed in Exempt Accommodation, their housing element is stable and not arbitrarily withdrawn. This is not the same as a rent guarantee, but it is more reliable than depending on a private company.
Higher Yields
Because Exempt Accommodation is exempt from LHA caps, the rates are significantly higher than standard private letting. Indicative figures are approximately £200-261 per room per week, depending on claimant type and area. Compare that to typical guaranteed rent rates that are deliberately set below market.
You Stay in Control
Unlike most guaranteed rent arrangements, you do not lease your property to a third party. You remain the owner and operator. You decide which tenants to accept. You manage the property on your terms.
Exempt from LHA Caps
Standard housing benefit is capped by Local Housing Allowance rates, which often fall below actual rents. Exempt Accommodation status removes this cap, allowing enhanced rates that reflect the cost of supported housing.
The Trade-Off: You Do the Work
This is not a passive income arrangement. If you want higher yields and government-backed payments, you need to understand what that requires.
This Is NOT:
- ✕A rent guarantee. Your income depends on occupancy.
- ✕Hands-off. You manage the property and handle tenant issues.
- ✕Risk-free. You carry void risk when rooms are empty.
- ✕Property management. No one else runs your property for you.
You Are Responsible For:
- •General maintenance and repairs
- •Day-to-day tenant issues and behavioural management
- •Property compliance and standards
- •Filling rooms and retaining tenants
- •Carrying void risk when rooms are unoccupied
If you already manage HMO properties, this is similar work to what you already do. The difference is the payment mechanism and the yields.
If you want someone else to manage everything, this model is not for you.
How This Compares to Guaranteed Rent
Understanding the differences helps you decide which approach suits your situation.
| Aspect | Commercial Guarantee | Exempt Accommodation |
|---|---|---|
| Income source | Private company | Government (DWP) |
| Reliability | Depends on company solvency | Depends on occupancy |
| Typical rates | 10-20% below market | ~£200-261/room/week |
| Control | Property leased to third party | You remain owner/operator |
| Management | Usually handled by lessee | You manage the property |
| Void risk | Borne by guarantee company | Borne by you |
| Work required | Minimal | Hands-on management |
The key insight: commercial guarantees trade yield for (perceived) passivity. Exempt Accommodation offers higher yields and more reliable payment sources, but you do the work.
Estimate Your Potential Income
Use this calculator to see indicative income figures for your property under the Exempt Accommodation framework. Remember: actual income depends on occupancy and your operational management.
Is This Right for You?
This approach is not for everyone. It suits specific landlord profiles.
This may suit you if:
- •You already manage HMOs or are willing to do so
- •You want higher yields than standard private letting
- •You prefer government-backed payments over commercial guarantees
- •You are comfortable with hands-on property management
- •You want to stay in control of your property
This is not for you if:
- •You want someone else to manage everything
- •You need income regardless of occupancy
- •You are not willing to handle tenant issues
- •You want a completely passive investment
If you want reliable income because you want to step back completely, guaranteed rent might still be your best option despite the risks. But if you want reliable income and are prepared to work for it, this model likely offers better outcomes.
Find Out If Your Property Qualifies
Submit your property details for a suitability assessment. We will review your property and provide indicative income figures within 2 working days. No obligation.
Initial assessment provided free of charge.
Learn More
Explore these pages to understand the framework in more detail.
Important Information
This is not a rent guarantee. Your income depends on occupancy and your operational management. Void risk remains with you.
Government-backed does not mean risk-free. DWP payments are stable once tenants are correctly placed, but you are responsible for filling rooms and retaining tenants.
Income figures are indicative and vary by area and claimant type. Actual results depend on your specific property and how well you manage it.
All arrangements are documented through formal agreements. You should seek independent legal and financial advice before joining.