This would help to improve their credit scores and their chances of getting a mortgage, by allowing lenders to use rental payment data in the credit scoring process when they assess an application.
The challenge was announced in the Autumn Budget, and has been launched this week by the Economic Secretary to the Treasury, Stephen Barclay.
How does it work?
Winning bids to the Rent Recognition Challenge will be selected by a panel of leading figures from the Fintech sector. The competition will provide an initial round of grant funding to six promising proposals to help to turn the ideas into a workable product. The expert judges will then whittle the six down to just a handful of teams who will receive further funding and support to bring their ideas to market.
How will it help renters?
The Economic Secretary to the Treasury, Stephen Barclay, said: “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.
“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.”
The Challenge will open to applications early in the New Year, and development will conclude in October 2018.