Guaranteed rent schemes in London: how they work, what to watch for, and what you'll actually get paid

Not all 'guaranteed rent' is the same product. In London you'll encounter three distinct models, and they carry very different risks.

1. Council leasing schemes. Most London boroughs — including Croydon, Newham and Barking & Dagenham — run private sector leasing schemes to house families in temporary accommodation. The council (or its housing partner) leases your property for 2–5 years at a fixed rent, usually 10–20% below market. Upside: a public body is your tenant. Downside: the lowest rent of the three models, slower onboarding, and strict property condition requirements.

2. Company lets with serviced accommodation operators. A professional operator leases the property as a company tenant and uses it for corporate stays, contractor accommodation and insurance placements. Because the operator earns more from the property than a single AST tenant would, they can typically pay at or above market rent — our agreements pay a minimum of 5% above market, with fixed terms of up to five years.

3. Rent-to-rent and agent 'guarantees'. An individual or small agent sublets your property, often room by room. Some are well run; many are thinly capitalised, meaning the 'guarantee' is only as strong as the operator's bank balance. This is where most landlord horror stories come from.

Realistic figures for a company-let agreement with a professional operator, based on what we currently pay across our London portfolio:

• Outer south and east boroughs (Croydon, Barking & Dagenham, Bexley, Havering): 2 beds around £1,400–£1,700 per month, 3 beds £1,700–£2,100.

• Mid-band boroughs (Newham, Lewisham, Ealing, Hounslow, Enfield): 2 beds around £1,600–£1,950, 3 beds £1,950–£2,450.

• Inner and high-demand boroughs (Tower Hamlets, Southwark, Islington, Camden, Wandsworth): 2 beds around £2,000–£2,600, 3 beds £2,500–£3,200+.

Council schemes typically sit 10–20% below these figures. If any offer is dramatically above these ranges, treat it as a warning sign, not a bonus — an operator paying over the odds is an operator planning to cram in more occupants than your lease allows.

The headline rent is the easy part. These are the clauses that decide whether a guaranteed rent agreement is actually good for you:

Break clauses. A 6-month mutual break clause in a '5-year' contract means you have a 6-month contract. Look for landlord-only breaks, or none at all.

Void and arrears wording. True guaranteed rent pays you even when the property is empty. If the contract says rent is paid 'subject to occupancy' or deducts void periods, it isn't guaranteed rent — it's a management agreement wearing a costume.

Repairs and dilapidations. Who pays for what, and to what standard the property is returned at the end. A good operator handles day-to-day maintenance, professional cleaning between stays and fair wear and tear, and returns the property in the condition it was taken.

Use and occupancy limits. The contract should state exactly how the property will be used — company let, serviced accommodation, maximum guest numbers — so it can't quietly become an HMO.

Insurance and compliance. The operator should carry public liability insurance and take responsibility for guest-related damage via deposits, while you keep buildings insurance and your landlord-level obligations (gas safety, EICR, EPC).

A well-run short-let in a strong borough can out-earn a guaranteed rent agreement by 20–40% in a good year. But that number hides the work: dynamic pricing, guest vetting, 24/7 messaging, cleaning logistics, maintenance callouts, deposit claims, and keeping on the right side of London's 90-night cap by mixing in mid-term lets.

Guaranteed rent trades that upside for certainty. One standing order a month, zero voids, zero arrears, zero 2am phone calls, and a single professional counterparty instead of hundreds of guests a year. For landlords with a day job, a portfolio to run, or a property they simply want off their desk for three to five years, that trade is usually worth it — especially at above-market rates.

The honest answer for many London landlords is that both work. The deciding factor is which you'd rather hold: the upside and the workload, or the certainty.

Ask for the company number and check it on Companies House — you want a trading history of several years and filed accounts, not a company incorporated last quarter.

Ask how the property will actually be used and who the end occupants are. A professional operator will tell you plainly: vetted corporate guests, contractor crews and insurance placements, each with ID checks, signed terms and a refundable security deposit.

Ask for landlord references and, ideally, to speak to a current client with a property like yours. Any operator paying genuinely guaranteed rent across a portfolio will have landlords happy to say so.

Finally, read the break clauses, the voids wording and the dilapidations clause before the headline rent. If an offer looks too good, the catch is almost always in one of those three places.

We're a serviced accommodation operator, and we sign company lets directly with London landlords. Our agreements pay a minimum of 5% above market rent, fixed for up to five years, with rent paid monthly whether the property is occupied or not. We handle all maintenance coordination, professional cleaning, guest vetting, ID checks and deposits, and we return the property in the condition we took it.

There's no setup fee and no tie-in beyond the agreed term. Send us the property details and we'll come back with a formal rent offer within 48 hours — use the form on our guaranteed rent London page, or browse the borough pages for Croydon, Newham and Barking & Dagenham for local figures.