Should Guaranteed Rent Company Lets Pay More Than the PRS?

Apex Housing Solutions
10 hours ago
3 min read

Guaranteed Rent vs PRS: It’s About Net Position, Not Headline Rent

A recurring argument from some agents and landlords is that because Apex is a company, we should pay more than private rental market value.

That logic doesn’t stand up commercially.

If anything, the opposite is true.

Headline Rent vs Net Income

Let’s take a simple example.

A £2,000 per month property let on the PRS through a typical London agent charging 15% + VAT leaves the landlord with roughly £1,640 per month.

Let the same property to Apex for £1,900 (5% below headline market rent) and the landlord receives the full £1,900.

No management fees.

No letting fees.

No renewal fees.

No deductions.

The question isn’t “why are Apex paying 5% less?” The real question is “why would a landlord accept 18% less?”

Net return is what matters.

Management Isn’t Free in the PRS

Landlords pay agents to manage tenants. Some well-known firms charge 20% + VAT for full management.

With guaranteed rent, landlords get a qualified, experienced team managing the property day to day without paying for it separately.

Expecting a company to pay more while also absorbing management responsibility makes no commercial sense.

Void Periods Change the Maths

RICS reports the average annual void period is now 24 days.

On a £2,000 per month property, that’s roughly £1,600 lost per year before re-letting fees, cleaning, or redecoration.

Apex pays rent whether the property is occupied or not.

Even at a slightly lower monthly figure, the annual return is often stronger because income is uninterrupted.

Legal Cost and Arrears Risk

In the PRS, if a tenant stops paying:

The landlord loses income.
Solicitors are instructed.
Court fees are paid.
Possession can take 9–12 months.

Government and sector surveys consistently show around a third of landlords have experienced rent arrears in recent years, and around one in six renters have fallen behind at some point during the cost-of-living crisis.

Under guaranteed rent, Apex is the legal tenant.

If there is a possession issue, Apex deals with it. Legal exposure transfers. Rent continues to be paid.

That risk transfer has value.

Deposit vs Corporate Covenant

In the PRS, protection is usually limited to a five-week deposit. That rarely covers prolonged arrears or serious damage.

Under a guaranteed rent agreement, the counterparty is a corporate tenant with assets, systems and ongoing commercial obligations.

That is a stronger covenant than a deposit certificate.

In commercial property, stronger covenant typically means lower yield, not higher.

Fixed-Term Security in a Changing Market

From 1 May 2026, all PRS tenancies become periodic.

Tenants can leave with notice at any point. Turnover risk increases. Predictability reduces.

Apex enters into long-term commercial agreements, typically three to five years.

Security has a value. Certainty has a value. Stable income has a value.

The “They’ll Trash the Property” Argument

This is often repeated, rarely evidenced.

Apex is the landlord’s legal tenant, not the occupant.

If a property falls below required standards, Apex risks not being paid by the local authority. It is in our commercial interest to keep properties well maintained.

Most households placed in temporary accommodation are families facing difficult circumstances. They are not moving into a property with the intention of damaging it.

And landlords do not deal with occupants directly. All communication and management sits with Apex.

Speed Reduces Exposure

Private tenants are often tied into their current rental and want to avoid paying double rent. That usually means four to six weeks before a move-in.

If Apex views a property today, and compliance is in place, agreements can often start within 24–48 hours.

That cuts void time, council tax liability and utility standing charges immediately.

The Commercial Reality

Guaranteed rent is a trade-off.

Landlord's exchange slightly lower headline rent for:

No management fees
No voids
No arrears risk
No legal exposure
No tenant contact
Long-term income certainty
Stronger covenant security
Higher overall net income

The debate should not be “Apex is a company, so they should pay more.”

It should be “there is a clear commercial trade-off for security, continuity and hassle-free income.”

When the net return is stronger and the risk is materially lower, it makes absolutely sense as to why a landlord would happily reduce the headline rent by a few percent!