Landlords/rental agencies must assess the creditworthiness of any potential guarantor and it is not illegal to stipulate property ownership within the specific requirements of making such an assessment.
I think it is legal
I cant think of any reason why it should not be:
discrimination, unfair clauses
[I have to say that I go much more for local reputation. I dont use agents as they were crap when I did. The only reason why I have had a guarantor, is so I can say , 'rent arrears, I wont sue if you get them out...]