Guaranteed Rent Mortgages: Which Lenders Accept Guaranteed Rent Schemes
By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 27 September 2026. Last reviewed 27 September 2026.
A guaranteed rent mortgage is a buy-to-let mortgage whose lender allows the property to be let to a company, council or housing provider that pays you a fixed rent every month, whether the property is occupied or not. Most standard buy-to-let mortgages do not allow this. The lender has to accept the lease or company let before you sign it.
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Book a free discovery callThat last sentence is the one most landlords only learn after they have signed. A letting agent, rent-to-rent operator, council scheme or asylum accommodation provider offers you a 3 or 5 year deal with no voids and no management fees. It sounds like the easiest income in property. Then you read your mortgage offer and find the words “assured shorthold tenancy to an individual”. This page explains how guaranteed rent schemes work, which lenders accept them and on what terms (checked September 2026), how rental cover is calculated when the guaranteed rent is below market rent, the contract clauses that sink cases, and how we place them.
What is a guaranteed rent scheme?
A guaranteed rent scheme is an arrangement where a company or public body rents your property from you for a fixed term at a fixed monthly rent, then places its own occupiers in it. You are paid whether the property is full, half full or empty. In exchange, the rent is usually set below open market rent, often by 10% to 20%, because the operator is taking the void risk, the management work and, in many schemes, routine repairs.
Legally, the operator becomes your tenant. It signs a company let or a lease with you, and it then grants its own tenancies, licences or occupancy agreements to the people who live there. That two-layer structure is what matters to a mortgage lender. The person living in your property is not your tenant, you have no direct relationship with them, and your right to get the property back depends on the wording of the lease, not on the Housing Act. Most of the websites ranking for “guaranteed rent scheme” are operators selling the scheme. None of them explain that structure’s effect on your mortgage, which is where deals fail.
What types of guaranteed rent scheme are there?
“Guaranteed rent” covers at least five very different arrangements. The strength of the paying party, the typical lease length and how lenders view it all vary, so the first job is to identify which one you have been offered.
| Scheme type | Who pays you | Typical term | Who lives there | How lenders tend to view it |
|---|---|---|---|---|
| Letting agent guaranteed rent | The agent’s own company | 1 to 5 years | Private tenants on ASTs or periodic tenancies granted by the agent | Mixed. Depends on the agent’s size and accounts; some lenders refuse all agent-backed schemes |
| Rent-to-rent (R2R) operator | A small limited company, often recently formed | 3 to 5 years | Usually HMO rooms or serviced accommodation guests | Hardest to finance. Many lenders refuse sub-letting outright |
| Council private sector leasing (PSL) | The local authority | 3 to 5 years, sometimes 7 to 10 | Homeless households in temporary accommodation | Widely accepted by specialist lenders within a maximum lease length |
| Housing association or supported living lease | A registered provider or supported housing operator | 3 to 10 years, often longer | Social tenants or vulnerable adults with support | Accepted by specialists; registered providers are treated better than unregistered operators |
| Asylum accommodation (Serco, Mears, Clearsprings) | A Home Office contractor | Commonly 5 years | Asylum seekers placed by the contractor | Accepted by a small group of specialist lenders; some mainstream lenders exclude it |
Each of those has its own detail page on this site: Serco buy-to-let mortgages, Mears, Clearsprings Ready Homes, supported living mortgages and social housing mortgages. This page is the overview that ties them together, with the focus on whether your mortgage allows the deal at all.
Why won’t my buy-to-let mortgage allow guaranteed rent?
Because a standard buy-to-let mortgage is priced and underwritten on the assumption that the property is let on an assured tenancy to individuals, and that the lender could sell it with vacant possession if it had to repossess. A guaranteed rent deal breaks both assumptions. The tenant is a company, and the lease can sit in front of the lender for years, with occupiers the lender has never vetted living in the property under sub-tenancies it never approved.
So most standard mortgage conditions do one of three things. They require an assured shorthold tenancy (in England, since 1 May 2026, an assured periodic tenancy under the Renters’ Rights Act) to named individuals. They ban sub-letting, assigning or “parting with possession”. Or they name guaranteed rent schemes as unacceptable. The Mortgage Works, one of the largest buy-to-let lenders, states in its intermediary criteria, checked September 2026: “We won’t accept tenancy agreements paid in cash or guaranteed rent schemes.” Signing a scheme on a mortgage like that is a breach of your mortgage terms. In the worst case the lender can demand repayment; more commonly the breach surfaces at remortgage, when the valuer or underwriter finds a lease the lender never agreed to.
Which lenders accept guaranteed rent, company lets or leases?
The honest answer is that no lender accepts “guaranteed rent” as a single category. They accept specific structures: a company let for the company’s own employees, a lease to a council or housing association, or a lease to a named social housing or asylum accommodation operator. The table below sets out what each lender publishes. Criteria change monthly, so treat this as the starting point we check against, not a promise.
| Lender | What it publishes | Source and date checked |
|---|---|---|
| The Mortgage Works | Refuses guaranteed rent schemes. Accepts non-assured tenancies up to 36 months to a local authority, housing association or corporate tenant; corporate lets only for the company’s own employees where it employs more than 1,000 UK staff | TMW intermediary general criteria, September 2026 |
| Foundation Home Loans | Company let accepted only for use by the company’s employees. Leases to a housing association or local authority on the government register of social housing providers (not a charity), up to 60 months, onward tenancies up to 36 months. No HMOs, supported accommodation or hostels. Rent used is the lower of contractual and open market rent. Maximum loan £3m | Foundation buy-to-let criteria guide dated 14 August 2026 |
| Rely (OSB Group, formerly Precise buy-to-let) | England: a single AST or a contractual or common law tenancy, which includes a company let. Fixed terms capped at 36 months with 12 month rent reviews beyond 12 months. Agreements must prevent sub-letting and parting with possession | Rely intermediary criteria, September 2026 |
| Paragon | Company lets up to 3 years. Lets to a local authority or housing association up to 5 years, provided the occupiers’ rights do not extend beyond the term granted to the housing body | Paragon buy-to-let lending guide, as published September 2026 |
| Keystone Property Finance | Considers corporate, local authority and housing association lets; a signed or proposed agreement must be seen on every case | Keystone standard lending criteria overview v18, September 2026 |
| Hampshire Trust Bank | Considers corporate agreements to a local authority, housing association or strong corporate or charity, and emergency, rehabilitation or social transition housing with a credible professional operator. Has marketed products for leases to Mears, Clearsprings and Serco | HTB criteria announcements; product terms confirmed case by case |
| Shawbrook | Social housing proposition for properties let to social housing operators, assessed as if let in the private rented sector, with simplified lease requirements | Shawbrook announcement 24 March 2026 |
| Together | Bespoke social housing and complex buy-to-let lending through a dedicated team | Together social housing page, September 2026 |
| Landbay | Published criteria require an assured periodic tenancy of up to 3 years on its Premier range and do not list company or guaranteed rent lets; any exception is by referral | Landbay intermediary criteria, September 2026 |
| Kent Reliance | Stopped taking new buy-to-let applications on 17 December 2025. Older guides still name it; it is no longer an option for new lending | OSB Group, December 2025 |
Two patterns stand out. First, mainstream lenders that accept “company lets” almost always mean a large employer housing its own staff, not an operator sub-letting to the public. Second, the lenders that accept leases to councils and housing associations set a maximum term, commonly 36 to 60 months. A 7 or 10 year lease that the operator presents as a selling point can put you outside most of the market. Aldermore also lends on corporate lets, but its full criteria for them were not publicly available when we checked, so we confirm terms directly on each case.
How do lenders calculate rental cover on guaranteed rent?
Lenders test whether the rent covers a stressed mortgage payment by a set margin, the interest cover ratio (ICR). The standard ICR in 2026 is 125% for limited companies and basic rate taxpayers and 140% to 145% for higher rate taxpayers, with a stress rate around 5.5% on 2 year fixes. The key question on a guaranteed rent case is which rent the lender uses. Most use the lower of the contractual rent in the lease and the open market rent the valuer puts on the property. Foundation states it in its criteria; Rely, TMW and Landbay apply ICRs of 125% for companies.
That has two consequences. If the guaranteed rent is below market rent, which it usually is, the lower guaranteed figure sets your maximum loan and can cut it sharply. If the lease rent is above market rent, which happens on some asylum and supported living leases, you do not get credit for the premium. The lender uses the valuer’s market figure because it has to assume the lease could end.
Worked example: guaranteed rent below market rent
A 3 bedroom semi in Stockport, bought for £220,000. The valuer puts open market rent at £1,150 a month (£13,800 a year). A guaranteed rent operator offers £1,000 a month (£12,000 a year) on a 3 year company let. The lender offers 75% loan to value (£165,000) with a 5.5% stress rate. These ICR and stress figures are typical of 2026 published criteria and are used for illustration.
| Step | Limited company, 125% ICR | Higher rate taxpayer, personal name, 140% ICR |
|---|---|---|
| Stress factor (ICR × 5.5%) | 1.25 × 5.5% = 6.875% | 1.40 × 5.5% = 7.70% |
| Max loan on guaranteed rent (£12,000) | £12,000 ÷ 0.06875 = £174,545 | £12,000 ÷ 0.077 = £155,844 |
| Max loan on market rent (£13,800) | £13,800 ÷ 0.06875 = £200,727 | £13,800 ÷ 0.077 = £179,221 |
| 75% LTV cap | £165,000 | £165,000 |
| Loan available on the guaranteed rent deal | £165,000 (LTV is the limit) | £155,844 (rent is the limit) |
| Extra deposit needed vs 75% plan | £0 | £9,156 |
The same deal works cleanly through a limited company and leaves a personal-name higher rate taxpayer £9,156 short. The £150 a month discount to market rent cost that borrower £23,377 of borrowing capacity (£179,221 less £155,844). That is why we run the rental calculation on the guaranteed figure before a landlord signs, not after. See our guide to limited company buy-to-let mortgages for how the structure changes the numbers, and the buy-to-let mortgage calculator to test your own figures.
Is guaranteed rent a good idea for landlords?
It can be, when the paying party is financially strong, the lease protects your asset, and your mortgage permits it. It is a poor idea when the operator is a two-year-old company with no accounts, the lease makes you liable for everything, and your lender has never been asked. The income is only guaranteed as far as the payer’s balance sheet and the contract wording go.
The fair comparison is net income, not headline rent. Using the Stockport example, with a letting agent charging 12% on the open market and one void month a year:
| Annual figure | Standard let through an agent | Guaranteed rent scheme |
|---|---|---|
| Gross rent | £13,800 | £12,000 |
| Voids (1 month) | minus £1,150 | £0 |
| Management at 12% of rent collected | minus £1,518 | £0 |
| Net before repairs, insurance and finance | £11,132 | £12,000 |
| Risk you keep | Arrears, voids, tenant selection | Operator failure, lease terms, end-of-lease condition |
On these figures the scheme wins by £868 a year, before counting your own time. Change one assumption, such as no voids, an 8% agent or a 20% discount, and it loses. The deciding factors are the payer’s strength and the lease, which is where the next two sections come in.
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Book a free discovery callWhat are the red flags in a guaranteed rent contract?
Every guaranteed rent case we see fails or succeeds on the lease. Lenders’ solicitors read it, and so should yours before you sign. These are the clauses that most often cause a decline or an expensive problem later.
| Clause or issue | What to look for | Why it matters |
|---|---|---|
| Lease length | Terms over 36 to 60 months, automatic renewal, options to extend | Takes the deal outside most lenders’ maximum term |
| Break clauses | Operator can end on 1 to 3 months’ notice; landlord cannot break at all | The guarantee is only as long as the operator’s notice period |
| Dilapidations and hand back | No obligation to return vacant possession in the original condition, fair wear and tear excepted | You can inherit damage and occupiers at the end |
| Sub-tenancies outliving the lease | Occupiers’ rights that can extend beyond the lease term | Paragon and others require occupiers’ rights to end with the lease |
| Who holds the licence | HMO or selective licence in the operator’s name, or no licence at all | Unlicensed HMOs expose the owner to rent repayment orders and fines |
| Subletting chains | The operator can assign or sub-let to another company | You may end up leased to a company you never checked |
| Rent reviews | Rent fixed for 5 years with no review | Rely requires 12 month reviews on terms over 12 months |
| Repairs split | “Full repairing” in the headline but structural, roof and boiler left with you | The net income comparison changes |
| Operator solvency | No accounts filed, no parent guarantee, no rent deposit | If the operator fails, rent stops and occupiers stay |
Rent-to-rent failures are not theoretical. Landlord publications have documented operators entering administration owing rent to dozens of landlords at once, leaving occupiers in place with no clear tenancy and the owners still liable for repairs and safety compliance. Guaranteed rent is only as good as the company behind the guarantee.
How do I check a guaranteed rent provider?
Do the checks a lender’s underwriter will do, before you commit. Most take less than an hour and can be done for free on public registers.
- Companies House: incorporation date, filed accounts, net assets, directors’ other companies and any history of dissolved or liquidated companies.
- Regulator status: for a housing association, confirm it appears on the gov.uk register of providers of social housing (Foundation requires this and excludes charities). For asylum accommodation, confirm who holds the Home Office contract in your region and whether you are dealing with them directly or a subcontractor.
- Redress scheme membership: letting and property management businesses in England must belong to a government approved redress scheme.
- Licencing: who will hold any HMO or selective licence, and whether the council has been told.
- References: ask for 3 current landlords and speak to them.
- Security: a rent deposit, a parent company guarantee, or both.
- The lease draft: send it to your broker before signing so it can be checked against lender criteria, and to a property solicitor.
- Insurance: confirm your landlord insurer covers a company let and the occupier type.
Can I put my mortgaged home on a guaranteed rent scheme?
Usually not on your existing residential mortgage. When you move out and let your former home, you need your lender’s consent to let. Residential lenders that grant consent generally expect an assured tenancy to individuals, and a lease to a company or operator rarely fits. If consent is refused, the options are to remortgage onto a buy-to-let product whose lender accepts the specific scheme, or a let-to-buy mortgage if you are buying your next home at the same time. Letting on a guaranteed rent scheme without consent is a breach of your residential mortgage, even if the operator tells you it is “just like a normal tenancy”.
Why do guaranteed rent mortgage applications get declined?
Most declines are predictable from the lease and the operator’s accounts. These are the reasons we see most often and what fixes them.
| Decline reason | The fix |
|---|---|
| Lender does not accept guaranteed rent or company lets at all | Place the case with a lender whose criteria name the structure you have, before the application |
| Lease term longer than the lender’s maximum | Negotiate a shorter term or a landlord break clause before signing, or use a lender with a longer limit |
| Rent too low to meet ICR | Borrow through a limited company at 125%, use a 5 year fix stressed at pay rate, or put in a larger deposit |
| Operator too new or has no accounts | Ask for a parent guarantee or rent deposit, or move to a lender that accepts newer operators with a credible track record |
| Occupier type excluded (for example supported accommodation or HMO) | Match to a specialist that lends on that use; see our HMO mortgage guide |
| Lease allows sub-tenancies beyond the term | Amend the lease so occupiers’ rights end with it |
| Deal discovered at remortgage on an existing mortgage that bans it | Refinance to an accepting lender and disclose the lease in full |
An illustrative Knox case
This case is anonymised and simplified to show the process. A landlord in Greater Manchester owned two terraced houses on a mainstream buy-to-let lender and had been offered a 5 year guaranteed rent deal by a rent-to-rent company at £850 a month each, against market rents of £975. The fixed rates were ending, and the landlord asked us to remortgage and “just add the new tenant”.
We read the draft lease first. The current lender’s criteria refused guaranteed rent schemes, so staying put on a product transfer and then signing would have breached the mortgage. The operator was 14 months old with no filed accounts, and the lease let it sub-let to any company it chose. Instead, we went back to the landlord with two options: a shorter 3 year company let with a landlord break clause, a 3 month rent deposit and no onward assignment, which fitted a specialist lender’s company let criteria; or a council private sector leasing scheme in the same borough that paid slightly less but had a public body behind it. The landlord chose the council lease for one house and a standard periodic tenancy for the other. Both were refinanced on the lower of lease and market rent, with the lease approved by the lender’s solicitors before completion.
How Knox places guaranteed rent mortgages
Corporate and social housing lets are one of our core specialisms. Our corporate lease buy-to-let and Serco pages are among the most read on this site, because landlords find very little mortgage-specific information elsewhere. Our process is the same on every case: identify the exact scheme structure, read the draft lease against lender criteria, run the rental calculation on the lower of lease and market rent, check the operator, then apply once, to a lender whose published criteria fit. If you are building a wider portfolio of leased properties, see our portfolio landlord mortgage guide, and our overview of buy-to-let mortgages for the standard rules.
If you have been offered a guaranteed rent deal, send us the draft lease before you sign. Book a free, no-obligation discovery call and we will tell you which lenders will accept it and how much you can borrow against it.
Guaranteed rent mortgage FAQs
Can I get a buy-to-let mortgage on a guaranteed rent scheme?
Yes, but only with a lender whose criteria accept the specific structure: a company let, a lease to a council or housing association, or a lease to a named social housing or asylum accommodation operator. Some large lenders refuse guaranteed rent schemes outright; The Mortgage Works says so in its criteria. Check the lease against lender criteria before you sign.
Does guaranteed rent breach my mortgage?
It will if your mortgage conditions require an assured tenancy to individuals, ban sub-letting or exclude guaranteed rent schemes, which most standard buy-to-let and all residential mortgages do. The breach can lead to the lender demanding repayment and usually surfaces at remortgage. Get the lender’s written acceptance, or move to a lender that accepts it, first.
What rent do lenders use on a guaranteed rent property?
Usually the lower of the contractual rent in the lease and the open market rent the valuer sets. Foundation publishes this rule. If the guaranteed rent is below market, it limits your loan; if the lease pays above market, the lender still uses market rent, because it has to assume the lease could end.
How long can a guaranteed rent lease be for a mortgage?
Commonly 36 months for company lets and up to 60 months for council and housing association leases. The Mortgage Works caps non-assured tenancies at 36 months, Rely caps fixed terms at 36 months, Paragon allows 5 years for council and housing association lets and Foundation 60 months. Longer leases need a specialist lender.
Is guaranteed rent a good idea?
It can be, when the paying party is strong, the lease protects you and your mortgage permits it. It is risky when the operator is new, has no accounts or can assign the lease. Compare net income after voids and management, not headline rent, and check the operator on Companies House and the relevant regulator register.
Do I need a limited company for a guaranteed rent mortgage?
No, but it often helps. Limited companies are usually assessed at 125% interest cover, against 140% to 145% for higher rate taxpayers in personal names. Where the guaranteed rent is below market rent, that difference can decide whether the loan works. Tax advice on the structure should come from an accountant.
Can I let my home on a council guaranteed rent scheme?
Not on your residential mortgage without the lender’s consent, and most residential lenders will not consent to a lease to a council or company. The usual route is to remortgage to a buy-to-let lender that accepts local authority leases within its maximum term. Some council schemes run 3 to 5 years, which fits several specialist lenders.
What happens if the guaranteed rent company goes bust?
The rent stops, but your mortgage payments do not. Occupiers may remain in the property and you may need to deal with them directly, possibly without a clear tenancy. This is why lenders check the operator’s accounts and why a rent deposit, a parent company guarantee and occupiers’ rights that end with the lease matter.
Related corporate-let and supported housing guides
Your home may be repossessed if you don’t keep up repayments on your mortgage.
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