Private tenants who are prompt with their rental payments may soon see their credit score boosted, which in turn could make it easier for them to get a foot on the housing ladder.
This comes after the news Parliament is to debate the idea of taking rental payments into account when people make an application for a mortgage.
The debate will take place following a petition on the issue raised by Plymouth construction worker Jamie Pogson attracted 147,307 signatures. This was substantially more than the 100,000 required to force a debate in Parliament.
Typically, credit rating agencies do not routinely include rental payments when calculating credit scores. This means a tenant could find it difficult to access a mortgage, even if they have a long history of prompt and full rental payments.
However, a recent survey of nearly 3,000 buy-to-let landlords carried out by the RLA discovered that 61% of landlords would support rental payments being added to credit histories, just in the same way as mortgage payments.
Including rent payments in this way will make it easier for landlords to ascertain a more accurate assessment of a prospective tenants’ credit and rental payment history.
With many tenants wanting to buy a house of their own, it is absurd rent payment is not routinely included when undertaking credit checks for mortgage applications.
Moving to such a scheme would help not just tenants, but also landlords by giving them a clearer sense of whether a prospective tenant has historically paid their rent in full and on time.
Thursday 21 September 2017
Number of buy to let mortgage products surges to 1,725
The number of new buy to let mortgages available to investors has hit 1,725 - its highest point since 1,942 products were recorded in December 2007, almost a decade ago.
Since January 1 this year - when the market saw a dramatic drop in the number of products available to landlords - the number of deals on offer has gone from strength to strength, culminating in a rise of seven per cent in the past four weeks.
Despite reduced BTL activity in the first quarter, competition among lenders remains high as providers fight to retain their standing in a diminished market. Rates have also fallen with the average two-year BTL fixed rate down from 2.91 per cent in August to 2.86 per cent in September - another record low.
Providers are now starting to get ready for further changes at the end of September, which will see lenders apply stricter standards to those investor-borrowers with four or more properties.
It is still uncertain how providers will choose to react to the new changes, but product numbers could climb as providers start to target their products to the two different types of borrower. However, despite this increased choice, rates might not improve.
The extra pressure on the buy to let market could be a turning point, with the competition that is currently alive and well amongst providers perhaps starting to ebb as they shift their focus to ensuring the new regulation is followed.
Since January 1 this year - when the market saw a dramatic drop in the number of products available to landlords - the number of deals on offer has gone from strength to strength, culminating in a rise of seven per cent in the past four weeks.
Despite reduced BTL activity in the first quarter, competition among lenders remains high as providers fight to retain their standing in a diminished market. Rates have also fallen with the average two-year BTL fixed rate down from 2.91 per cent in August to 2.86 per cent in September - another record low.
Providers are now starting to get ready for further changes at the end of September, which will see lenders apply stricter standards to those investor-borrowers with four or more properties.
It is still uncertain how providers will choose to react to the new changes, but product numbers could climb as providers start to target their products to the two different types of borrower. However, despite this increased choice, rates might not improve.
The extra pressure on the buy to let market could be a turning point, with the competition that is currently alive and well amongst providers perhaps starting to ebb as they shift their focus to ensuring the new regulation is followed.
Rents rising 2.4% across the UK
Rents in the UK rose by an average of 2.4 per cent during August - the highest rate of annual growth seen this year.
The average rent agreed on a new tenancy signed last month was £939 according to the HomeLet, compared to £916 in the same month of 2016.
August’s increase in average rents was partly driven by a return to inflation in the London market, where rents agreed on new tenancies last month were also 2.4 per cent higher than in August 2016. Last month’s increase took the average rent in the capital to £1,609 – the first-time rents in London have been above £1,600.
Excluding London, rental price inflation has also picked up, with 10 out of the 11 remaining regions beyond the capital seeing rents increasing last month. The average rent on a new tenancy outside London was £776, up 2.3 per cent compared to the same period in 2016.
Rents rose fastest in the South West of England (up 3.9 per cent compared to August 2016) and Northern Ireland (3.7 per cent), with only the South East recording a decline - it was down 0.2 per cent.
The average rent agreed on a new tenancy signed last month was £939 according to the HomeLet, compared to £916 in the same month of 2016.
August’s increase in average rents was partly driven by a return to inflation in the London market, where rents agreed on new tenancies last month were also 2.4 per cent higher than in August 2016. Last month’s increase took the average rent in the capital to £1,609 – the first-time rents in London have been above £1,600.
Excluding London, rental price inflation has also picked up, with 10 out of the 11 remaining regions beyond the capital seeing rents increasing last month. The average rent on a new tenancy outside London was £776, up 2.3 per cent compared to the same period in 2016.
Rents rose fastest in the South West of England (up 3.9 per cent compared to August 2016) and Northern Ireland (3.7 per cent), with only the South East recording a decline - it was down 0.2 per cent.
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