RLA call for credit referencing agencies to include rental payments

by Property 118

3 months ago

RLA call for credit referencing agencies to include rental payments

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RLA call for credit referencing agencies to include rental payments

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.

 

Comments

In other words, tenants can be thieves and have no consequences for that at all (at least for a very long time).
Anyone else missing a payment of and installment or mortgage will be severely punished.

christine walker

3 months ago

The Landlord or letting agent should already ask for proof of rental payments or previous mortgage payments from prospective tenants as a matter of course without yet more legislation interference from the government. Landlords are having a hard time already with section 24 and CGT on selling

John Frith

3 months ago

One small step in the right direction would be for Custodial Deposit providers to routinely report to the credit agencies if a LL had successfully claimed a deduction from the deposit for rent arrears.

Yvette Newbury

3 months ago

But Experian did this already. They contacted me in January 2016 and discussed it as I was keen to see this go through. However, when the scheme came out it had been contracted to a third party who demanded that all payments went through them before payment to the landlord and it would only be them who could report to Experian for it to go on the tenants credit file. Perhaps the reason was similar to that stated above, that individual landlords would not be able to report on the tenant to Experian as they are not consumer loans.

Mike D

3 months ago

If they are not willing to do this there should be a 'Black List' through agencies that stop people renting that have defaulted on their rent, or issued a S21 / S8.

Dylan Morris

3 months ago

I think the RLA are living in a fantasy world. I'm a small time private landlord with around half a dozen properties and I manage them myself. How on earth could my tenants' rent conduct be obtained by Experian or Equifax ?

Mark Alexander

3 months ago

If all landlords and agents used agencies to collect rent by direct debit this would be possible.

When a tenant signs a lease they are committing to X number of payments over the term of the lease.

Government could insults on all rent being collected by direct debit via approved agencies, of which there could be many.

These agencies could also cooperate with HMRC to discover tax evaders.

Dylan Morris

3 months ago

Reply to the comment left by Mark Alexander at 17/08/2017 - 22:10
So will this be the next thing to batter landlords with, that we all have to use letting agencies (many are untrustworthy) to collect our rent payments. Good business for agents, but I don't want to lose any more of my rental income thank you very much.

John Frith

3 months ago

I don't understand this:

"because a tenancy agreement is not considered a consumer loan meaning there is currently no authority to collect this information"

Mobile phone contracts are not consumer loans either, but missed payments show up on Experian.

Reply to the comment left by Dylan Morris at 17/08/2017 - 22:38
Exactly - we are already so heavily burdened & regulated. I have never and will never use an agent, they are all totally useless and trusting them with collecting rent and paying for that is out of questions.
Just in reply to John Firth's comment - indeed, you are right. Once I missed a payment for tights (!) - £19.95, not because I could not afford, but simply forgot -and after a week I got a letter threatening me with Experian and Credit Score! There should be a way the LLs could report DOCUMENTED rent arrears - but not through another layer of bureaucracy and extra intermediary.

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The RLA Campaigns Team is pleased to report the Government listened to us on UC