Housing: Rent Payment History

Lord Bird Excerpts

Wednesday 31st October 2018 Lords Chamber

Asked by

[Lord Bird]

To ask Her Majesty’s Government what steps they are taking to ensure that where tenants share payment of rent their individual payment histories will be taken into account by credit service providers.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government believe it is right that a history of paying rent should be recognised in tenants’ credit scores, including where tenants share payment of their rent. At the Autumn Budget in 2017 we announced the Rent Recognition Challenge, a £2 million competition seeking technological solutions to enable tenants to record and share their rental data.

[Lord Bird (CB)]

My Lords, I thank the noble Lord for that Answer. The real problem is not so much gathering the information—although it is very good that we are getting a move on towards doing that—but getting the credit service providers to use it. Are the Government doing anything in particular to make sure that all this information helps to put an end to the divide between the people who have a mortgage and can get a high credit rating and those who get a low credit rating simply because they are paying rent?

[Lord Bates]

First, I pay tribute to the work that the noble Lord has consistently done in raising this issue up the agenda. It is indeed something that the Government are taking seriously and they are working with the Financial Conduct Authority and the regulators to see how this can be done. The noble Lord will have noticed the welcome announcement last week that Experian intends to take into account rental contributions as part of credit scoring. That will make a significant difference along the lines that we want—that is, getting the major credit reference agencies to use this data in ensuring that lenders have an accurate reflection of an applicant’s ability to service a loan.