What is a Guaranteed Rent Scheme and Is It Right for You?
November 2, 2024
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TL;DR
Rent arrears can seriously affect landlord cash flow, especially under the new rental rules introduced in England from 1 May 2026. For landlords who want to reduce exposure to missed payments, a guaranteed rent scheme with Citywide Housing can provide agreed monthly income, no voids, no arrears, no repairs and no tenant issues.
What’s in This Article:
- Why rent arrears are a bigger concern in 2026
- How Rent arrears affect landlord income
- What the new rental rules mean for arrears risk
- How guaranteed rent helps landlords avoid arrears
- Why commercial leases provide more stability
- What landlords should review before arrears become a problem
- FAQs about Rent arrears
- Final thoughts and next step
Introduction
Rent arrears are one of the biggest risks landlords face because missed payments can quickly affect mortgage cover, cash flow and long-term returns. Under the new rental rules in England, landlords need to be more careful about managing risk, keeping records and planning income. A guaranteed rent scheme can help suitable landlords avoid arrears and protect monthly income.
For many landlords, the concern is not only one missed payment.
The real worry is what happens when missed payments become a pattern, costs keep rising and the landlord still has to cover the property’s financial responsibilities.
Why Rent Arrears Are a Bigger Concern in 2026
Rent arrears are a bigger concern in 2026 because landlords are operating in a changed rental landscape.
Since 1 May 2026, the Renters’ Rights Act has changed how landlords let private properties in England. Landlords can no longer use Section 21 no-fault eviction and must rely on valid legal grounds if they need to regain possession.
This means landlords need to be more organised when dealing with arrears.
They need to think about:
- Accurate rent records
- Communication history
- Notice requirements
- Possession grounds
- Court processes
- Evidence of missed payments
- Tenant affordability concerns
- Cash flow protection
This does not mean landlords cannot act when rent is unpaid. However, it does mean landlords should not wait until arrears become a serious problem before reviewing their options.
How Rent arrears Affect Landlord Income
Rent arrears affect landlord income because the landlord may still have to pay property costs even when rent has not been received.
A landlord may still need to cover:
- Mortgage payments
- Buildings insurance
- Service charges where applicable
- Maintenance costs
- Compliance costs
- Utility bills where applicable
- Council tax during void periods
- Legal or possession costs
This can quickly turn a profitable property into a stressful one.
For example, if a tenant misses two months of rent at £1,200 per month, the landlord is already £2,400 down before any additional costs are included.
If the issue continues, the landlord may also face time spent chasing rent, arranging notices, speaking to agents and dealing with legal processes.
Why Rent arrears can become a long-term problem
Rent arrears can become a long-term problem because missed payments often create pressure beyond the unpaid rent itself.
They can affect:
- Mortgage confidence
- Portfolio cash flow
- Personal savings
- Future investment plans
- Landlord stress levels
- Decision-making around selling or keeping the property
For portfolio landlords, arrears across more than one property can become especially difficult.
Even if most tenants pay on time, one difficult case can take up a large amount of time and attention.
What the New Rental Rules Mean for Arrears Risk
The new rental rules mean landlords need to understand the correct process for dealing with arrears.
Government guidance confirms that landlords cannot use Section 21 after 1 May 2026. Instead, landlords must use valid possession grounds where they need to seek possession through the courts.
For rent arrears, government guidance refers to Ground 8, which can apply where a tenant owes at least three months’ rent if they pay monthly, or at least 13 weeks’ rent if they pay weekly or fortnightly. The tenant must owe that amount both when the notice is served and at the hearing.
This makes early arrears management important.
Landlords should not ignore:
- Late rent
- Repeated partial payments
- Broken payment plans
- Poor communication
- Missed promises to pay
- Increasing debt
- Affordability concerns
The earlier landlords deal with arrears, the easier it may be to manage the situation.
Why Traditional Letting Leaves Landlords Exposed
Traditional letting can leave landlords exposed because the rent depends on the tenant paying correctly each month.
Even with referencing, problems can still happen.
A tenant may experience:
- Job loss
- Reduced hours
- Relationship breakdown
- Health issues
- Unexpected financial pressure
- Benefit payment delays
- Personal debt problems
Landlords can be sympathetic, but the financial impact still falls on them.
The landlord may still need to cover the mortgage, insurance and other property costs.
That is why many landlords are now asking whether they want to keep carrying rent collection risk themselves.
How Guaranteed Rent Helps Landlords Avoid Arrears
Guaranteed rent helps landlords avoid arrears by replacing tenant-based rent collection with an agreed monthly rental arrangement.
With Citywide Housing, suitable landlords can benefit from:
- Guaranteed rent
- Market rents paid
- No voids
- No arrears
- No repairs
- No tenant issues
- 3 to 5 year commercial leases
- Longer-term options where suitable
This means the landlord receives the agreed rent under the lease arrangement, rather than relying on individual tenant payments.
For landlords who are tired of rent chasing, this can be a major relief.
It helps turn the property into a more predictable income asset.
For more information, visit:
https://www.citywidehousing.co.uk/guaranteed-rent/
Traditional Letting vs Guaranteed Rent for Arrears Risk
The difference becomes clear when you compare both options.
| Risk Area | Traditional Letting | Citywide Housing Guaranteed Rent |
|---|---|---|
| Rent payment | Depends on tenant paying | Agreed monthly rent |
| Arrears | Possible | No arrears |
| Voids | Possible | No voids |
| Repairs | Often landlord concern | No repairs |
| Tenant issues | Can involve landlord | No tenant issues |
| Income planning | Can fluctuate | More predictable |
| Lease length | Often shorter-term | 3 to 5 year commercial leases |
| Landlord stress | Can be high | Reduced day-to-day involvement |
For landlords who want full control of private letting, traditional rental may still suit them.
For landlords who want predictable income and less stress, guaranteed rent can be more attractive.
Why Commercial Leases Provide More Stability
Commercial leases provide more stability because they create a longer-term arrangement with clearer income expectations.
Citywide Housing commonly works with 3 to 5 year commercial leases, depending on the property, location and agreement. Some leases may be extendable where suitable.
This can help landlords avoid:
- Monthly rent uncertainty
- Tenant payment delays
- Re-letting gaps
- Repeated occupant turnover
- Arrears stress
- Constant management decisions
- Short-term income disruption
A commercial lease can be especially useful for landlords with:
- HMOs
- Blocks of flats
- Family houses
- Self-contained flats
- Larger rental portfolios
For many landlords, the benefit is simple.
They keep the property, but reduce the financial uncertainty that comes with traditional letting.
What Landlords Should Review Before Arrears Become a Problem
Landlords should review arrears risk before missed rent becomes serious.
Important questions include:
- How dependent am I on monthly rent arriving on time?
- Could I cover three months without rent?
- Do I have clear rent records?
- How quickly do I respond to late payments?
- Do I understand the possession grounds?
- Do I want to keep handling rent chasing?
- Is traditional letting still worth the stress?
- Would guaranteed rent suit my property better?
Landlords should also review whether they have the right documents in place.
This may include:
- Tenancy paperwork
- Rent records
- Gas safety certificate
- Electrical certificate
- EPC
- Insurance documents
- HMO licence where applicable
- Communication history with tenants
Good organisation matters more under the new rental rules.
Which Landlords Benefit Most From No Arrears?
No arrears can be especially valuable for landlords who rely on predictable rent.
This may include landlords who are:
- Paying a mortgage
- Managing several properties
- Approaching retirement
- Living outside the local area
- Tired of chasing payments
- Concerned about legal changes
- Considering selling due to stress
- Looking for hands-off rental income
It may also suit landlords with:
- HMOs
- Blocks of flats
- Family houses
- Self-contained flats
- Properties in high-demand housing areas
In our experience, many landlords do not want to exit property completely. They simply want the income to become more reliable and the stress to reduce.
How the Citywide Housing Process Works
The Citywide Housing process is designed to be practical and clear for landlords.
A typical route may include:
- Initial enquiry with the housing team
- Property location review
- Property assessment
- Compliance and document check
- Rental offer
- Commercial lease review
- Lease agreement
- Property handover
- Agreed monthly rent payments
This gives landlords a structured route from enquiry to fixed rental income.
It also helps confirm whether the property is suitable before a lease is agreed.
For landlord information, visit:
https://www.citywidehousing.co.uk/landlords/
Is Guaranteed Rent Right for Every Landlord?
Guaranteed rent is not right for every landlord.
It may be suitable if you want:
- Fixed monthly income
- No voids
- No arrears
- No repairs
- No tenant issues
- A 3 to 5 year commercial lease
- Less day-to-day involvement
It may not be suitable if you want full control over traditional private letting or direct involvement in tenant management.
The right option depends on your property, goals and appetite for risk.
FAQs About Rent arrears
Rent arrears happen when rent is not paid when it is due. This can include missed payments, partial payments or unpaid rent building up over time.
Rent arrears are serious because landlords may still need to pay mortgages, insurance, repairs and compliance costs even when rent has not been received.
Yes. Landlords can still act where rent is unpaid, but they must follow the correct legal process and rely on valid grounds where possession is needed.
Guaranteed rent helps because the landlord receives agreed monthly rent under the lease arrangement. With Citywide Housing, suitable landlords benefit from no arrears.
Conclusion: Protect Your Income Before Arrears Start
Rent arrears can quickly damage landlord income, especially when costs continue and rent does not arrive.
Under the new rental rules, landlords need to be more organised, more informed and more careful about risk. For landlords who want to reduce exposure to missed payments, guaranteed rent can be a practical solution.
Citywide Housing offers suitable landlords guaranteed rent, market rents paid, no voids, no arrears, no repairs, no tenant issues and 3 to 5 year commercial leases.
If you own an HMO, block of flats, family house or suitable rental property, speak to the Citywide Housing team today for a free property assessment.
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