The Renters' Rights Act is a hassle for landlords, but it should be advantageous to newly listed RentGuarantor Holdings
Is it wise to invest?
The Renters' Rights Act, one of the most important pieces of legislation to affect the UK rental market in decades, has given RentGuarantor Holdings (Aim: RGG) a boost. The Act has only been in effect since the beginning of May, but it is already causing the market to be completely rewritten. The new law eliminates fixed-term tenancies, prohibits "no fault" evictions, limits rent increases to once a year, and prohibits the landlord from serving notice to sell or move back into the property during the first twelve months of the tenancy. Instead of safeguarding tenants, these modifications have made landlords more cautious.
The modifications have put additional strain on a system that is already in danger of collapsing by making it much more difficult for landlords to evict tenants who cannot or will not pay their rent. The average time from claim to repossession has increased to more than 68 weeks from just over 20 weeks in 2019, according to professional association Propertymark, as a result of protracted court backlogs. The average amount of unpaid rent at the time of eviction is 19,223 in London and 12,708 in England and Wales.
In response, landlords now require tenants to present a guarantor prior to signing contracts. Around 40% of landlords now demand guarantors for both new and existing tenants, according to several reports. This is where RentGuarantor is useful.
RentGuarantor's operation.
The company is a unique illustration of how successful London's capital markets can be for startups. Paul Foy, a real estate investor since the mid-1980s, founded RentGuarantor in 2016. As the name suggests, it guarantees rents. Tenants pay £20 for an initial background check, and the company uses AI and Open Banking to determine the tenant's financial capacity and ability to make payments on time. RentGuarantor can provide the guarantee if the tenant passes the check, which must be completed that same day.
Depending on the underlying risk profile, this results in an additional cost that is typically between three and five weeks' rent. RentGuarantor gives the landlord or letting agent a legally enforceable guarantee of rental payments after the tenant has paid and signed. In contrast to more conventional guarantors like parents or grandparents, this offers the landlord an additional degree of security. RentGuarantor collects the origination fee, transfers the risk to a group of insurers, and continues to be the primary point of contact for clients.
RentGuarantor Holdings has been in the London market for five years.
Foy and his team built the business for five years before going public in 2021. With very little revenue, it went public on the Aquis exchange in 2021 and switched to the Aim junior market in the latter part of 2025. In order to fund its expansion initiatives, the new listing raised £4 million in 2025. At the end of the year, its revenue was £2.4 million, an 87 percent increase from the previous year. With a 30% share, the founder has continued to be a significant investor.
RentGuarantor hasn't entered the market with the intention of achieving rapid growth and using shareholder goodwill to finance expenditures. Marketing expenditures, which came to just 200,000 in 2024 and 500,000 in 2025 against revenue of 2.4 million, or roughly 165 per contract (based on the year-end figure of 3,123 contracts), are tightly controlled. For the last five years, the emphasis has been on improving the offering and setting up the necessary team and technology to scale up successfully.
The company is now at the stage where its efforts are starting to pay off. RentGuarantor's unaudited revenue increased by 115% in May, the month the Renters' Rights Act went into effect, compared to the average for the first four months of the year. Additionally, revenue per contract increased by 24%. In addition, the group exceeded the board's expectations by recording its first positive monthly Ebitda earnings since it began trading.
RentGuarantor Holdings's difficulties.
Scaling up without collapsing, as many businesses do when they experience an unexpected spike in demand, will be the group's main risk. Demand for guarantees is rising as a result of the Act, but disputes will also increase.
RentGuarantor has an AI specialist in its orbit and is looking to AI for assistance. Dave Cliff, a non-executive director and University of Bristol computer science professor, is spearheading the AI strategy. RentGuarantor appears to be well-positioned to fully capitalize on the advantages of the technology, in contrast to many other companies that appear to be turning to AI with little real understanding of the advantages, disadvantages, and costs. He previously worked at MIT's artificial intelligence laboratory. The group can handle 20,000 contracts annually, according to management, but with AI's assistance, that number will increase to 100,000.
RentGuarantor could sign 7,000 contracts this year, 13,000 in 2027, and 62,000 by 2030, according to house broker Shore Capital. In 2026, revenue might reach £6 million; by 2028, it might reach £19 million; by 2030, it might reach £54 million. The group would still only have 3.4 percent of the potential market even if it were to reach this ambitious growth.
Now that the company is essentially self-funding, marketing expenditures could increase. By 2030, Shore Capital anticipates a ten-fold increase, which its 79 percent gross margin will easily cover. By 2028, the broker has projected 3.6p in adjusted earnings per share. These projections show the growth potential if the company is able to scale up over the next 12 months, but they are likely to be off, as is the case with all early-stage firms. This is a risky venture, but it has a sizable and expanding market to back it.
Share price chart for RentGuarantor Holdings.
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