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A Question of Property: Sheraz Dar, CEO of CreditLadder

A year ago few agents had heard of 'rent recognition' but it's now a hot topic as the government starts a £2m rental tech race to help get more tenants onto the property ladder.

Nigel Lewis

The government is pulling out all the political stops to fix the UK’s ‘broken’ housing market and that includes helping more people to get on the property ladder.

As part of this billion-pound push, HM Treasury last week announced that six tech firms had been chosen to compete in a £2 million race to develop a tech platform that will help tenants achieve home ownership more easily.

CreditLadder.co.uk is one of them. It’s an online service that enables tenants to report their rental payments to Experian for free with the minimum of form filling. Its basic service is free for renters to use but the site charges agents a small fee to offer its service to tenants.

Its website was the first in the UK to use Open Banking technology to enable tenants to report their rent. Tenants give CreditLadder permission to ‘read’ their bank account every month and verify that the rent has been paid in full and on time.

CreditLadder is also the first in the UK to enable customers of Monzo and Starling Bank to report their rent to Experian. The Negotiator caught up CEO Sheraz Dar, who has a track record in both tech and property, to quiz him about what he and the business are up to.

Can your service help agents with the tenant fees ban?

The Tenant Fees Bill will make the lettings environment tougher and, depending on the agency, revenue may be lost.

Data shows that tenants on the CreditLadder platform are 20 times more likely to pay their rent on time than the national average. Our rent arrears are under half a percent as tenants are incentivised to pay on time. Such on-time rent payments will have a positive impact on credit history. Late or missed payments could have the opposite effect.

Consequently, we help letting agents find the best tenants which in turn increases operational efficiencies by eliminating high-maintenance tenants.

Why should agents care about the Rent Recognition Challenge?

It’s the government’s response, in part, to the recent parliamentary e-petition signed by nearly 150,000 people.  This helped persuade the government to offer help to tenants who find it difficult to get a mortgage when they have weak credit histories.

£2 million is being spent on the competition, which has picked six tech firms including us and has given them £100,000 each to develop their ideas. The remainder of the money will then fund an eventual finalist or finalists to take it to market.

Why help tenants get on the housing ladder?

The housing market is an ecosystem and if there’s no movement within it, the whole thing falls apart. House movers need first time buyers because movements within the housing market across renting, buying and selling are in everyone’s interest.

Can agents plug CreditLadder into their software?

The beauty of CreditLadder is it requires zero integration or admin for letting agents.

Won’t you only attract good tenants?

On average rent arrears affect 10% of all tenancies each month, which indicates that 90% of tenants pay in full and on time.

We believe that every agent and every landlord would want to prioritise these tenants. Our platform allows agents to find them.

What’s your ultimate goal for the business?

Our aim is that every tenant in the UK will benefit from rent recognition because it allows them to access finance at better rates. This will fuel more economic activity, which in turn will benefit everyone.

Later this year CreditLadder will introduce enhanced rent collection and distribution products which we believe will bring further efficiency to the sector.

Can you make a difference to the housing sector?

Yes. There is clear evidence of financial exclusion in the housing market that is exacerbated because rent payments – until now – have not been recognised by lenders. We believe any initiative that supports this is absolutely worthwhile.

Who’s behind CreditLadder?

I’m the CEO of CreditLadder and I’ve been in the business from the beginning. We have a strong team with experience across the property sector.

Our funding comes from a range of private investors including a family office based in London.

Also, we have recently received further funding from HM Treasury via the Rent Recognition Competition, which is designed to find a tech led solution to help ensure a tenant’s rent payment is recognised.

March 29, 2018

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