“Generation Rent” has become shorthand for young people unable to get on the housing ladder due to rising house prices, high rental costs and thin credit files, something the UK government is looking to tackle with the Rental recognition Challenge: A prize for entrepreneurs looking to solve this problem.
Bud, an open banking platform, is using the prize fund to build artificially intelligent software that automatically detects when an individual is paying rent and prompts them to get the payments verified. These verified payments are all gathered in a ‘rental profile’ and are able to be shared via API technologies to digital mortgage brokers, banks and other relevant services such as Credit Ladder, and RentalStep, the other winners of the challenge.
Renters in the UK market haven’t had a good time of it of late. According to the Royal Institute of Chartered Surveyors (RICS), 11 million households are facing rent increases of 15% over 5 years (RICS) and in the first quarter of 2018, 72% of mortgage applications for purchase were via a limited company (Kent Reliance’s Buy To Let Britain report).
Bud says the goal for their technology is to help people understand the usefulness of the data hidden away in their bank and to get more renters with thin credit files approved for mortgages and onto the housing ladder.
“The affordability of housing is a huge problem for millions of people and whilst its not a silver bullet, helping people to understand their data better has to be part of the solution.” Ed Maslaveckas, Bud’s founder says, “Notifying people proactively that rent could now help their credit history and making that process easy are good steps in the right direction.”
Bud is using a combination of open banking technology, transactional data ported over by users, and their network of integrated financial services companies to create this journey. It has already integrated with large banks such as HSBC to help them develop new customer propositions, including artha, an app by first direct that connects bank accounts together to help with money management.