UK Treasury looks to fintech to revive the mortgage market

UK Treasury looks to fintech to revive the mortgage market

HM Treasury is offering £2 million to budding entrepreneurs who can develop an application that will enable Britain’s 11 million renters to record and share their rent payment data, helping to improve their credit scores and their chances of getting a mortgage.

Winning bids to the Rent Recognition Challenge will be selected by a panel of "leading figures" from the fintech sector, says the Treasury.

The economic secretary to the Treasury, Stephen Barclay, says: "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.

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."

The competition will provide an initial round of grant funding to six promising proposals to help to turn the ideas into a workable product. The expert judges will then whittle the six down to just a handful of teams who will receive further funding and support to bring their ideas to market.

Comments: (3)

Asa Bentley
Asa Bentley - CREDITLADDER - London 06 December, 2017, 11:55Be the first to give this comment the thumbs up 0 likes

This is great news for tenants. With an average 47% of income spent on rent (English Housing Survey) it should be a tenants right to have this recorded on their credit file. Interestingly a fintech does already exist. Since early 2016 CreditLadder has helped thousands of tenants have their rent payment data reported to Experian's Rental Exchange, for free. This week will see Lord Bird of the Big Issue and The Young Foundation press forward with the #makerentcount campaign to spread the message of rent reporting to credit reference agencies. All very positive and a step in the right direction for the Government and their support of such initiatives.

Bojan Mijuskovic
Bojan Mijuskovic - N/A - LEMESOS 06 December, 2017, 12:03Be the first to give this comment the thumbs up 0 likes

I was under impression www.rented.com was doing just that. It looks like they didn't enter UK market, yet.

A Finextra member
A Finextra member 06 December, 2017, 12:531 like 1 like

So surely creditladder should just get the money if they're already in the marketplace?  I know there's lots of discussions also taking place at a payment scheme level around permissioned data sharing which should also provide a similar result.