Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
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The Residential Landlords Association (RLA) have today called for credit referencing agencies, such as Experian and Equifax, to include rental payment history when calculating the credit rating of tenants.
This would seem only fair when the penalty for landlords and home owners for even one month of missed mortgage payment can be so severe when applying for a new loan or mortgage.
However, the practicalities of this are very difficult, because a tenancy agreement is not considered a consumer loan meaning there is currently no authority to collect this information, who would collect it and how can you be sure it is accurate.
The RLA conducted a survey of 3000 Landlords showing 61% would be in favour of rental payments being included in a credit score. This would obviously assist landlords for any reference assessment in taking on a new tenant.
Therefore the RLA is writing to the government requesting cooperation with the industry to consider how rental payment history could be included when calculating credit scores.
Alan Ward, RLA’s Chairman, said: “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.”
Experian themselves have recently suggested a similar idea so watch this space although, government appetite for anything that may help landlords or in anyway disadvantage renters from getting on the property ladder will be low while chasing popular opinion in a hung Parliament.
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