Some Facts on Guaranteed Rent and Rent Protection Insurance

There is a major difference between rent guarantee insurance/rent protection and a guaranteed rent scheme. With rent security insurance, the landlord will require to make a request to their insurance provider once the tenant has met a fixed minimum for the amount of rent they have in arrears. Once the tenant has met this fixed minimum, the landlord can file a claim to recover the lost income.



With a guaranteed rent in London, the company providing the service agrees to pay the landlord the full rental amount – regardless of whether the tenants have paid or not. This means that the landlord will receive their rent on the due date each and every month. This is especially useful for Buy to let landlords who need to pay the BTL mortgage payments for the property each month.

Below, we go into more detail about the differences between guaranteed rent and rent protection insurance, the different variations in each category and the pros and cons of each service to help you figure out which options will be the best fit for you and your property.

What is a Rent to Rent Scheme?

A Rent to Rent scheme usually describes an arrangement between a landlord and a letting agent or other company where the landlord agrees to rent their property to the agent/company for a fixed rental amount. The agent or company will agree to pay the landlord the agreed amount on the due date each month for the duration of their contract (usually 6 or 12 months). The agent/company will then sub-let the landlord’s property to tenants, but for a slightly higher price than what they are paying to the landlord. This allows them to earn money on the difference between the amount they take from the tenants and the amount they pay to the landlord.

The landlord normally understands that the agent is charging the tenants a higher amount than what they are paying to the landlord each month, but they are happy to accept this due to the fact that they are guaranteed to receive their rent each and every month – regardless of whether the tenant pays or not.

What About Rent on Time or Guaranteed Rent

There are some other services available which will guarantee to pay your rent on the due date every month but do not sub-let the property in the same way as a Rent To Rent scheme. These types of services are usually referred to as “Rent on Time” or “Guaranteed Rent” but they are normally only offered as add-ons to other more comprehensive services. For example, the National Landlord’s Association offers a Rent on Time service but you have to agree to let the NLA handle the rent collection and use their full tenant referencing service to be eligible.