This week an article on a property news website damned guaranteed rent as a scam and criticised providers for their lack of protection of landlords. Here, Nick Cooper, MD of our company which has an 18 year track record in providing a guaranteed rent service to thousands of satisfied landlords, addresses the issues raised.
“As an established, respected and leading national provider of guaranteed rent, I feel passionately about addressing some of the points made in the article, which I believe could be misleading to landlords and consumers. To suggest that guaranteed rent is a “scam” is simply not true.
Northwood‘s business model is centred on the principle of guaranteed rent and it is a principle that has worked well for us and the tens of thousands of landlords who we have served in our 18-year history.
While I cannot speak for all providers of guaranteed rent, at Northwood all of our contracts are approved by Trading Standards and by lenders and we underwrite our franchisees’ guaranteed rent contracts. To say there is “zero protection” for the landlord is factually incorrect. Just ask our 20,000 landlords, currently benefitting from the reassurance that this guarantee sits within our franchise agreement and not in the guaranteed rent contract. It provides umbrella cover for both landlords and tenants in any circumstances when an office might have to close.
We are also nothing short of 100% committed to finding the very best tenants and we do not permit multiple sublets within a property. To suggest that all providers of guaranteed rent would put asylum seekers or poor quality tenants into a landlord’s home is fundamentally misleading, not to mention scaremongering. When the responsibility for guaranteeing the rent sits with us and our contracts compel us to repair the property at the end of contract, why would we want anything less than the very best tenant?
It is also important to point out that there IS a downside to the guaranteed rent insurance policies being promoted in the article. The reality is that many don’t pay out when the property is vacant and some only pay out on arrears once the tenant is already two months behind. With a service such as Northwood’s guaranteed rent, in such a situation, the landlord would still be continuously be receiving the rent.
There may well be rogue agents operating so-called “scams” and we wouldn’t dispute that landlords should be made aware of them. However, I object to the article tarring all providers of guaranteed rent with the same brush and would urge anyone considering guaranteed rent not to be put off by this article. If you’re still in doubt visit the Northwood website www.northwooduk.com or call your local Northwood office who will be happy to help.”