Property Guardianship vs. Traditional Tenancy
With wages stagnating and property prices rising, the homeownership dream is drifting further and further away from many. For this reason many turn to renting, only to be met by astronomical rent, bidding wars and eye-watering utility bills. Housing however isn’t a binary issue, there is another option available. Property Guardianship may not be a new concept but it remains relatively unknown, despite the fact that it is a valuable third option for many.
In the Netherlands, antikraak – the original guardianship scheme – sits equally alongside buying and renting and is its own, explicit entity with established guidelines and legal precedence. In the UK, with rent prices continuing to soar, guardian schemes continue to become more mainstream. However, there is still some confusion around the differences between being a guardian and a traditional tenant.
Below we review the key areas and terminology that differentiate property guardians from traditional tenants.
| GUARDIAN | TENANT |
| Protects a property by occupying it on a residential basis, but does not have exclusive possession | Occupies and possesses the property throughout their tenancy |
| Signs a licence agreement | Signs a tenancy agreement |
| Pays a licence fee | Pays rent |
| Receive 28 days notice | Receives two month eviction notice |
| Provides 28 days notice, no break clauses needed | Must see out the lease which can be up to two years |
| Pays on average only 25% of their salary on accommodation costs | Pay on average over 50% of their salary on rent (in London this is 78%) |
Guardianship offers some amazing benefits – affordable accommodation, strong communities, unique buildings to live in, and flexibility. It is not a permanent solution to the current housing crisis, but it is a great stepping stone for many.
Who is Guardianship suitable for?
– Those saving to buy a home
– Those saving for further education
– Key workers looking to live near their workplace
– Creatives looking to save on accommodation costs
– Entrepreneurs prioritising business ventures
– Those saving for travel
– Those in-between private rentals
– Those looking for flexible accommodation
– Those looking to live in unique communities
Temporary living arrangements, whilst providing unique flexibility, come with some uncertainty. The reality is that eventually, every guardian property will be handed back to the owner at some point. This is why LOWE has some prerequisites to becoming a licensee. The last thing we want is to add undue stress, so we require licensees to pass affordability and background checks, and due to the short notice period, we don’t allow children to live in our guardianships.
Who is Guardianship not suitable for?
– Those with children
– Those who aren’t working
– Those with pets
– Those with a history of antisocial behaviour or criminal records
– Undergraduate students
So what is the functional distinction day-to-day? There are a couple of key processes we use to help make sure all parties are clear on the situation. The monthly fire inspections ensure that the building is being cared for and that our guardians are protecting the property to the best of their ability. Inspections also reiterate the guardians’ relationship to the property – they do not possess it, but rather protect it.
You can get started on your journey to becoming a LOWE Licensee by today by filling out our application form.