Government lays down fintech challenge to help renters
The government has offered a £2 million reward for entrepreneurs who can develop a new application to help renters record their payment data in order to boost their credit scores.
With 11 million people in Britain currently renting and many wanting to get buy a home, the aim of the app would be to provide the information needed to bolster their chances of being accepted for mortgages when they do take their first steps onto the housing ladder.
The challenge had been originally mooted in his autumn Budget by chancellor Philip Hammond, and was formally launched by economic secretary to the Treasury Stephen Barclay at the Fintech Connect Live conference yesterday (December 6th).
Known as the Rent Recognition Challenge, the competition will be judged by experts from the fintech sector.
Speaking about the advantages the app will provide, Mr 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."
The development is another demonstration of the potential value of using software packages to track and manage all aspects of rental and managing property, something that can benefit tenants and landlords alike.
It also shows that the range of products and their capacity to provide solutions to a range of issues in constantly evolving. This means even in instances where there were no software packages in place to meet particular requirements just a few years ago, solutions may be available now or - in the rent recognition case - in the near future.
The challenge is to be opened to applications in the new year and the competition will conclude in October 2018.