A GOVERNMENT challenge offering a £2m prize for developing a solution for rental payment history to be recognised in credit scores will open in January, the Treasury has confirmed.
The competition, dubbed the Rent Recognition Challenge, was first mentioned in last month’s Budget, and follows concerns that mortgage lenders fail to consider rental payment history as evidence of affordability as it doesn’t show up on a credit report.
Fintech firms – and all budding entrepreneurs – will have a chance to apply for a prize worth £2m between January and March 2018, with development running until October 2018.
Winning bids will be selected by a panel of leading figures from the fintech sector, with six receiving £100,000 each to develop a prototype and three or four of them getting further funding to bring their ideas to market.
“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,” Stephen Barclay, economic secretary to the Treasury, said.
“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 and help to restore the dream of home ownership for a new generation.”