Housing

Are renters set to get a long overdue hand-up the mortgage ladder?

Big Issue Invest-backed Rental Exchange could help make home ownership a reality for thousands of renters

Rent debt and eviction bans need tackling during the Covid-19 pandemic

Credit: iStock / Getty / oversnap

It is an exasperated cry we hear again and again from frustrated would-be home-owners. “I have been paying all this rent for years and years, yet mortgage lenders won’t take that into account”. But this could be about to change thanks to a scheme backed by Big Issue Invest and a petition that has captured the public imagination to such an extent it is now set to be debated in Parliament.

Home ownership could now be one step closer for thousands of renters, with Rental Exchange showing the way.

https://youtu.be/77fYrNlPikU

The scheme, which has been running since 2012, has grown to the extent that regular payments from more than 850,000 social housing tenants (around a quarter of all UK social housing tenants) are now shared with Experian, meaning they can be included in credit rating scores in future. The scheme has since expanded to include private renters.

With an estimated 13.5million UK adults currently estimated to have little or no recorded credit history or information on file, from which mortgage lenders assess their ability to pay, the scheme is already of vital importance to opening up the housing market.

And the groundbreaking idea could be about to go one step further, which could open up the possibility of getting a mortgage to thousands of people who have diligently paid rent yet found this does not help their credit rating or improve their ability to buy a home, even if the amount paid per month is likely to be similar.

Our aim is to create a fairer society and build equality across the UK population

A petition created by Plymouth man Jamie Pogson builds on the Rental Exchange scheme idea, saying: “Make paying rent enough proof that you are able meet mortgage repayments.” After gaining more than 145,000 signatures it will now be debated in Parliament, with one Parliamentarian, The Big Issue’s founder, Lord John Bird, already giving the idea the thumbs up.

Having conducted research to show how effective the Rental Exchange scheme has been to date, and how much it could help renters wanting to become buyers, Big Issue Invest’s managing director, John Montague, said: “Our aim is to create a fairer society and build equality across the UK population. Such a data sharing scheme as The Rental Exchange, working in partnership with Experian, will ultimately help tenants strengthen their credit report, to gain greater access to mainstream financial services and to get authenticated for online services.”

So are renters about to get a much needed hand-up the housing ladder? Watch this space for further developments…

Main image: iStock / Getty / oversnap

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