Residential Landlords Association
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MPs quote RLA campaign in credit score debate

The RLA’s work on plans to include rent payment history within credit scores was cited by a number of MPs during a Westminster Hall debate recently.

The RLA has called for these proposals to be introduced after a survey of almost 3,000 landlords found that 61 per cent would support such a move.

At present, credit rating agencies do not routinely include rent payment history when calculating credit scores. This means a tenant can find it difficult to access a mortgage, even if they have a long history of rent being paid in full and on time.

David Jones MP (Conservative, Clywd West – Former Welsh Secretary) effectively went through all the points raised in the RLA’s briefing.

Paul Scully MP (Conservative, Sutton and Cheam) welcomed the RLA’s support for the proposal as well as noting its concerns over the increased bureaucracy proposed in the model put forward by credit checking firm Experian.

He said: “I am pleased that the Residential Landlords Association supports the petition, although it expressed some concerns about the Rental Exchange system, as smaller landlords must go through ‚Äčanother layer of bureaucracy in order to be included: their rents must first be paid to a “credit ladder” before being passed on to them.

“The RLA expressed concern that that muddies the water about who chases rent arrears and distances landlords further from tenants.”

The RLA believes including rent payments when calculating credit scores would also support landlords, providing them with a more accurate assessment of a prospective tenant’s credit and rent payment history – and has written to the government proposing this.

The debate was triggered  after an online petition, demanding that a history of punctual rent payments should be recognised as evidence that mortgage repayments can be met, attracted almost 150,000 signatures.

Concluding the debate the Economic Secretary to the Treasury, Stephen Barclay MP, said: “Although it is encouraging to see the number of mortgages granted to first-time buyers, now at the highest levels since the financial crisis, it is clear that many people still struggle to make the first step on to the housing ladder.

“Lenders and credit reference agencies being able to access data relating to a prospective borrower’s history of paying rent will benefit both the borrower and the lender.

“There are already private sector solutions, some of which we have heard about in the debate. I am keen to look for ways to raise awareness of those, and to look at how we use open banking to open up further possibilities in future.

“We have had a very constructive debate and I look forward to having further discussions with Members in the coming weeks.”

To access the full debate transcript click here.

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