Stephen Barclay MP, the Economic Secretary to the Treasury, has revealed details of a £2 million competition to develop tech that will enable Britain’s 11 million renters to record and share their rental payments data with credit reference agencies and lenders.
The announcement was originally buried in the Autumn Budget in the full text of Philip Hammond’s speech, and is an attempt by the government to stimulate innovation within the lettings market.
Called the Rent Recognition Challenge, it will open in the New Year with a March deadline for completed submissions.
After fielding submissions, £100,000 will be given to six hopefuls who will then use the money to develop their ideas into a workable product. The winners, who will be picked by a panel of senior fintech figures, will be announced in October 2018.
“People’s monthly rent is often their biggest expense, so it makes sense for it to be recognised when applying for a mortgage. Without a good credit score, getting a mortgage can be a real struggle,” says Stephen Barclay (pictured, left).
“Most lenders and Credit Reference Agencies are unable to take rental data into account, because they don’t have access to it. The Rent Recognition Challenge will challenge firms to develop an innovative solution to this problem and help to restore the dream of home ownership for a new generation.”
The initiative is the government’s response to two recent campaigns both of which started in Parliament.
Plymouth builder Jamie Pogson (pictured, right) started a e-petition calling for rent to be added to tenants’ credit histories after he struggled to get a mortgage because of his poor credit rating. The petition was signed by over 147,000 people.
It was then debated in the House of Commons last month, as all e-petitions which receive more than 100,000 signatures are required to be, but is unlikely to be turned into legislation.
And last week Lord Bird’s Creditworthiness Bill received it second reading in parliament, which proposes that both rental and council tax payment records are added to tenants’ credit files.
But the announcement has prompted some head scratching within the credit industry; two platform already offer tenants the ability to track and share their rental payment – Experian’s Rental Exchange and CreditLadder.co.uk.
“CreditLadder is already helping thousands of tenants have their on-time rental payments taken into account,” says Sheraz Dar, CEO of CreditLadder.co.uk.
Anyone with questions about the competition should email: [email protected]