A GOVERNMENT-BACKED £2m fintech competition to develop tools that incorporate rental payments into a tenant’s credit score has opened for applications.
The Treasury has released application forms and entry criteria for the Rent Recognition Challenge.
Firms are asked to outline the consumer journey and how data will be accessed, used and protected as well as any market research to support the product and an idea of how much it would cost to develop.
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.
The application deadline is 9 March 2018, with development running until October 2018.
The competition was first mentioned in November’s Autumn Budget, following concerns that mortgage lenders fail to consider rental payment history as evidence of affordability as it does not show up on a credit report.
“Currently, a history of meeting rent payments is not routinely recognised in people’s credit scores, and is not commonly taken into account when banks conduct mortgage affordability assessments,” the Treasury said.
“This increases the cost of borrowing for rental tenants, and creates a barrier to getting onto the housing ladder.
“Rent payments are usually an individual’s largest monthly outgoings, and are therefore a significant indicator of one’s creditworthiness as a borrower. For this reason, it is right that a history of successfully paying your rent should be recorded and recognised.”