Guaranteed Rent vs Insurance: A 2025 Guide for UK Landlords

With eviction rules tightening and tenant protections increasing across the UK, many landlords are thinking carefully about how to safeguard their rental income. In 2025, understanding the difference between Rent Guarantee Insurance and Guaranteed Rent is more important than ever. Here's a clear breakdown of what each means, how they work, and what to consider before deciding what's right for your property.

What Is Rent Guarantee Insurance?

Rent Guarantee Insurance (RGI) is a policy designed to protect landlords if a tenant stops paying rent. If certain conditions are met, the insurance provider will cover unpaid rent for a fixed period (usually 6 or 12 months).

However, it comes with limitations:

• Strict eligibility criteria (e.g. referencing must be done to the insurer's standards)

• Delayed payouts (typically only after 1-2 months of arrears and court action begins)

• Not always inclusive of legal costs or void periods

• You, the landlord, are responsible for chasing the tenant and handling legal processes

RGI is best viewed as a financial safety net with strings attached. It can work well — if everything is done exactly right.

What Is Guaranteed Rent?

Guaranteed Rent is a service, not an insurance product. A property management company like McLains effectively becomes your tenant. We pay you a fixed monthly rent, whether or not the property is let, occupied, or the occupant is paying.

We then manage the tenancy in full — from subletting and rent collection to maintenance, legal support, and dealing with any arrears or disputes.

Here’s how our model stands out:

• Landlords receive consistent, predictable income with no exposure to non-payment

• Tenants benefit from a no-deposit model, making it easier and faster to move in. Instead of a traditional deposit, they pay a small percentage-based fee that covers rent protection, while landlords still receive the equivalent security — without the admin of deposit handling

• McLains guarantees the rent, manages the tenant, and absorbs the risk

In exchange, landlords agree to a slightly higher management fee — but gain total peace of mind, professional oversight, and legal cover.

Pros & Cons: Side-by-Side

Why This Matters More in 2025

The Renters (Reform) Bill and the abolition of Section 21 mean landlords can no longer rely on quick, no-fault evictions. Legal processes are becoming longer, more complex, and more expensive — especially if tenants contest possession or fall into arrears.

Whether you own one property or manage a portfolio, having a reliable income stream and minimising legal exposure is becoming essential — not optional.

What Should You Consider as a Landlord?

1. Risk Appetite – Are you willing to chase arrears and wait months for resolution?

2. Time Commitment – Do you have the capacity to manage disputes, court procedures, and insurance claims?

3. Income Priorities – Would you prefer a slightly lower rent in exchange for zero hassle and guaranteed payment?

4. Deposit-Free Tenancies – Are you open to offering no-deposit tenancies in exchange for a higher quality tenant pool and guaranteed cover?

Final Thought: Getting the Right Support

Both models have their place. Rent Guarantee Insurance may suit hands-on landlords with reliable tenants. Guaranteed Rent through McLains is often a better fit for landlords who want stability, simplicity, and protection against the unknown — without relying on insurance providers or handling legal enforcement themselves.

If you're considering Guaranteed Rent and want to ensure your income is fully protected with no gaps or legal hassle, McLains can help.

To learn more about how Guaranteed Rent could apply to your property, get in touch with McLains for expert support and a no-obligation discussion.