Rent Guarantor Guidance for Local Housing Authorities [HTML]

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Overview

This consultation document invites views on the Welsh Government’s proposals for guidance to local authorities.

How to respond

Submit your comments by 19 October 2026, in any of the following ways:

complete our online form
download, complete our response form and email: PrivateSectorHousing@gov.wales (please include the reference WG54879 in the subject of your email)
download, complete our response form and post to:

Consultation: WG54879

Housing Affordability Team
Housing and Regeneration Directorate
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Further information and related documents

Large print, Braille and alternative language versions of this document are available on request.

Contact details

For further information:

Housing Affordability Team
Housing and Regeneration Directorate
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Email: PrivateSectorHousing@gov.wales

This document is also available in Welsh: Canllawiau i Awdurdodau Lleol ar Warantwyr Rhent | LLYW.CYMRU

UK General Data Protection Regulation (UK GDPR)

The Welsh Government will be data controller for Welsh Government consultations and for any personal data you provide as part of your response to the consultation.

Welsh Ministers have statutory powers they will rely on to process this personal data which will enable them to make informed decisions about how they exercise their public functions. The lawful basis for processing information in this data collection exercise is our public task; that is, exercising our official authority to undertake the core role and functions of the Welsh Government. (Art 6(1)(e))

Any response you send us will be seen in full by Welsh Government staff dealing with the issues which this consultation is about or planning future consultations. In the case of joint consultations this may also include other public authorities. Where the Welsh Government undertakes further analysis of consultation responses then this work may be commissioned to be carried out by an accredited third party (e.g. a research organisation or a consultancy company). Any such work will only be undertaken under contract. Welsh Government’s standard terms and conditions for such contracts set out strict requirements for the processing and safekeeping of personal data.

In order to show that the consultation was carried out properly, the Welsh Government intends to publish a summary of the responses to this document. We may also publish responses in full. We publish responses anonymously and your name and contact details will not be included. If you would like your name or other details published alongside your response, please let us know when you submit your response, and we will include them.

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Your rights

Under the data protection legislation, you have the right:

to be informed of the personal data held about you and to access it
to require us to rectify inaccuracies in that data
to (in certain circumstances) object to or restrict processing
for (in certain circumstances) your data to be ‘erased’
to (in certain circumstances) data portability
to lodge a complaint with the Information Commissioner’s Office (ICO) who is our independent regulator for data protection

For further details about the information the Welsh Government holds and its use, or if you want to exercise your rights under the UK GDPR, please see contact details below:

Data Protection Officer:

Welsh Government
Cathays Park
CARDIFF
CF10 3NQ

e-mail: dataprotectionofficer@gov.wales

The contact details for the Information Commissioner’s Office are:

Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Tel: 0303 123 1113

Website: https://ico.org.uk/

Background and proposals

Background

Section 38 of the Homelessness and Social Housing Allocations (Wales) Act 2026 (‘the Act’) contains provisions related to the provision of guidance to local housing authorities about making arrangements under which a local housing authority guarantees payment of rent by an occupier of housing accommodation in accordance with an agreement of any kind.
In addition, before giving such guidance, Welsh Ministers must consult local housing authorities and any other persons they consider appropriate.

Proposals

This consultation seeks views on draft guidance which Welsh Ministers are required to issue to local housing authorities under the powers contained in the Act. The draft guidance is set out in Annex 1. It has been developed in partnership with local authorities via a task and finish group.

Annex 1: Rent Guarantor Guidance for Local Authorities in Wales

1. Purpose of this Guidance

This guidance is intended to support Welsh local housing authorities in the development, review, or operation of rent guarantor schemes. Such schemes are designed to improve access to the private rented sector (PRS) for households who may otherwise be unable to secure accommodation due to the absence of a suitable personal guarantor.

This guidance sets out a consistent approach for local housing authorities that choose to act as a rent guarantor for individuals accessing the PRS. It aims to:

Support access to suitable accommodation
Ensure public funds are used responsibly
Provide clarity on roles, responsibilities, and risk management
Promote consistency across local authorities

This guidance is issued under section 38 of the Homelessness and Social Housing Allocation (Wales) Act 2026. It should be read alongside relevant legislation, other applicable guidance, and local policies. It does not constitute legal advice.

2. Policy Context in Wales

Rent guarantor schemes contribute to the prevention and relief of homelessness and support wider housing objectives, including:

Duties under Part 2 of the Housing (Wales) Act 2014 to prevent and relieve homelessness .
The legal framework governing occupation contracts under the Renting Homes (Wales) Act 2016.
Welsh Government priorities on homelessness prevention, rapid rehousing, and access to suitable accommodation.

Rent guarantor schemes can play a significant role in preventing homelessness by addressing one of the principal barriers to accessing and sustaining accommodation in the private rented sector: the requirement for a guarantor.

By providing a guarantee to landlords against rent arrears, these arrangements enable households who may be at risk of homelessness - including young people, care leavers, low-income households and those with a history of homelessness - to secure and retain suitable accommodation.

Rent guarantor schemes also support the Welsh Government's Rapid Rehousing approach by helping people move directly into settled homes rather than remaining in temporary accommodation or progressing through multiple stages of supported housing. They can also increase landlords' confidence in letting to households who might otherwise be perceived as higher risk, expanding access to the private rented sector and reducing pressure on homelessness services.

By facilitating earlier move-on from temporary accommodation and preventing tenancy breakdown, rent guarantor schemes contribute to reduced use of costly temporary accommodation, improved housing outcomes, and a more efficient homelessness system focused on prevention and rapid access to permanent housing.

Local authorities should ensure that any rent guarantor scheme aligns with their Local Housing Strategy, Homelessness Strategy, and Rapid Rehousing Transition Plan.

3. What Is a Rent Guarantor Scheme?

A rent guarantor scheme is an arrangement where a local authority (or a provider acting on its behalf) agrees to act as a guarantor for “the payment of rent by ‘an occupier’ of housing accommodation in accordance with ‘an agreement of any kind” – usually a contract holder’s rental obligations to a private landlord, though licence holders or occupiers under other arrangements may be included. Typically, this covers:

Rent arrears (up to a defined financial limit)

Schemes may be delivered:

Directly by the local authority
Through a commissioned third-sector organisation
In partnership with a private sector leasing or access scheme

4. Objectives of a Rent Guarantor Scheme

Local authorities should clearly define the objectives of their scheme, which may include:

Preventing homelessness by sustaining access to the PRS
Relieving homelessness by securing settled accommodation
Supporting households who are unable to provide a traditional guarantor
Reducing reliance on temporary accommodation

5. Contract holder Eligibility Criteria

Local authorities should set transparent and equitable eligibility criteria. These may include:

People experiencing homelessness or threatened with homelessness
Over 18
Demonstrate ability to sustain the tenancy
No significant or unresolved rent arrears or debt issues that would present a substantial risk to the sustainability of the tenancy, unless appropriate repayment arrangements are in place

6. Property / Landlord Eligibility Criteria

To manage risk and ensure quality, local authority schemes should require that:

The property / landlord meets Rent Smart Wales registration and licensing requirements and, where applicable HMO licensing requirements.
The property is fit for human habitation and complies with all relevant statutory requirements relating to housing condition and occupant health and safety
The landlord agrees to grant an occupation contract and comply with all relevant requirements of the Renting Homes (Wales) Act 2016
The rent level is reasonable and in line with Local Housing Allowance rates or local market rents and the affordability of the property for the intended household

7. Scope of the Guarantee

Local authorities should clearly define the scope and limits of the guarantee, including:

The maximum financial liability (e.g. equivalent to X weeks’ or months’ rent)
The duration of the guarantee (e.g. fixed term or time-limited)
What is covered (rent arrears, property damage, legal costs, or exclusions)
Circumstances in which the guarantee may be withdrawn

The guarantee should be documented in a formal agreement between the authority (or scheme provider) and the landlord.

8. Roles and Responsibilities

8.1 Local Authority / Scheme Provider

Local authorities may consider acting as a guarantor where:

The individual would otherwise be unable to secure accommodation
The tenancy is suitable, affordable, and sustainable
The arrangement supports homelessness prevention or move‑on from temporary accommodation
The landlord requires a guarantor as a condition of granting the tenancy

Local authorities should:

Assess eligibility and affordability
Issue and manage the rent guarantee agreement
Set out a clear process for claims
Make payments in line with the terms of the guarantee, where necessary
Support contract holders to sustain their tenancy

Local authorities should avoid acting as a guarantor where:

The tenancy is unaffordable
The property does not comply with relevant statutory requirements
The individual has unresolved support needs that would make the tenancy unsustainable
The landlord’s requirements are unreasonable or discriminatory

8.2 Responsibilities of the Contract holder

Contract holders should be required to:

Pay rent in full and on time
Comply with the occupation contract
Engage with support services where offered
Notify the authority of any changes in circumstances which may affect eligibility

8.3 Responsibility of the Landlord

Landlords should be required to:

Provide a written occupation contract and comply with all relevant requirements of the Renting Homes (Wales) Act 2016
Maintain the property in accordance with legal requirements
Provide all relevant documentation as required (e.g. gas / electric safety certificate)
Comply with Rent Smart Wales registration and licensing requirements
Comply with HMO licensing requirements, where applicable
Follow due process before seeking possession
Cooperate with support services where appropriate
Notify the local authority promptly of rent arrears or tenancy issues
Notify the local authority of any change in circumstances

9. Tenancy Sustainment and Support

Rent guarantor schemes should be linked to tenancy sustainment support, which may include:

Budgeting and money advice
Benefits maximisation
Mediation between landlord and contract holder
Referrals to specialist support services

Early intervention is critical to preventing rent arrears and tenancy breakdown.

10. Equality, Fairness and Welsh Language

Local authorities must ensure that schemes:

Comply with the Equality Act 2010, including the Public Sector Equality Duty
Are accessible to people with protected characteristics
Do not unlawfully discriminate against benefit claimants
Are delivered in accordance with Welsh language standards, offering services in Welsh where required

11. Data Protection and Information Sharing

Local authorities must ensure compliance with:

UK GDPR and the Data Protection Act 2018
Clear information-sharing agreements with landlords and partners
Transparent privacy notices for applicants

12. Monitoring, Review and Governance

Schemes should be subject to regular review, including:

Uptake and outcomes (e.g. homelessness prevention/relief)
Financial exposure and claims against the guarantee
Equality impacts
Landlord and contract holder feedback

Clear governance arrangements should be in place, including approval thresholds and audit arrangements.

13. Risk Management

Local authorities should identify and manage risks, including:

Financial exposure and budget controls
Reputational risk
Legal compliance

Risk mitigation may include caps on liability, time-limited guarantees, and proactive tenancy management.

14. Complaints and Disputes