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More backing for using rent payments to show mortgage eligibility

Specialist mortgage lender Together is the latest company to back the idea of rent payment records being used to measure the eligibility of individuals to secure mortgages. 

Last week Letting Agent Today ran a story on an online petition set up by an individual tenant urging that his regular rent payments should be one measure of his eligibility to secure a mortgage when he comes to buy a property.

In the past both the Experian credit data company and the National Approved Lettings Scheme have given their backing to similar proposals. 

Now Pete Ball, head of personal finance at specialist lender Together, says the support for the petition indicates how popular the idea would be. 

"The changes the government has introduced in the buy to let sector...were intended to level the playing field and ensure more property was available. But what this petition highlights is that there needs to be better access to finance alongside this, so that these aspiring homeowners can get a mortgage for the property” says Ball.

"The impressive surge in popularity of this petition is clear evidence of the growing frustration among thousands of renters that aspire to own their first home but are struggling to obtain a mortgage from the mainstream banks” he continues. 

Ball says many traditional lenders exercise rigid criteria, with proof of rental payments not necessarily taken into account as part of the application process.

“As this petition clearly demonstrates there is a need to compile more detailed data on the credit profile of individuals, which will then help lenders to assess their applications when they look to obtain a mortgage. If there is a debate following the petition and it leads to new and improved measures in this space, that will be a positive step for both lenders and these aspiring homeowners.”

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