The government says that later this year it will allocate a further £1.4m to PropTech firms looking at how tenants’ rent payments can be linked with helping them become owner occupiers in the future.
In last November’s Budget Chancellor Phillip Hammond announced that a total of £2m would be set aside for budding PropTech and financial technology entrepreneurs who can develop an application that will enable Britain’s 11m renters to record and share their rent payment data, helping to improve their credit scores and thus their chances of getting a mortgage.
Currently, strong payment records by tenants are not counted towards their credit scores.
A shortlist of six PropTech projects has now been drawn up: CreditLadder, Bud, Canopy, FirstHomeCoach, Movem and RentalStep.
The judging panel included Al Lukies (Motive Partners, Rent Recognition Challenge Sector Champion), Charlotte Crosswell (Innovate Finance), Paul Smee (UK Finance), Eileen Burbidge (HM Treasury FinTech envoy), Diederick Van Thiel (Advice Robo) and Neil Munroe (CRS Insights).
“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 the Economic Secretary to the Treasury, Stephen Barclay.
“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” he adds.