Private tenants who pay their rent on time could soon see their credit rating boosted in order to make it easier for them to gain a foot on the housing ladder, after it was announced that parliament will debate the idea of taking rent payments into account when people apply for a mortgage.
The debate will take place after a petition on the issue raised by Plymouth construction worker Jamie Pogson attracted 147,307 signatures, which is significantly more than the 100,000 needed to force a debate in parliament.
Credit rating agencies do not currently routinely include rent payment history when calculating credit scores. This means a tenant can find it difficult to access a mortgage, even if they have a long history of rent being paid in full and on time.
But a recent survey of almost 3,000 buy-to-let landlords carried out by the Residential Landlords Association (RLA) found that 61% of landlords would support rental payments being added to tenants’ credit histories in the same way mortgage payments are.
The RLA believes that including rent payment in this way would also make it easier for landlords to make a more accurate assessment of a prospective tenant’s credit and rent payment history.
The RLA’s chairman, Alan Ward, commented: “With many tenants wanting to buy a house of their own, it is absurd rent payment is not routinely included when undertaking credit checks for mortgage applications.
“Moving to such a scheme would help not just tenants, but also landlords by giving them a clearer sense of whether a prospective tenant has historically paid their rent in full and on time.”
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