More backing for rental payments to be used to prove eligibility

Specialist mortgage lender Together has become the latest company to give its backing to the use of rental payments being used in order to measure the eligibility of individuals to secure mortgages.

Recently, an online petition has been set up by an individual tenant that urges regular rental payments to be considered as a measure of his eligibility to secure a mortgage when coming to purchase a property.

Popularity

Pete Ball, head of personal finance at specialist lender, Together, says that the support for the petition shows how popular the idea would be.

Ball noted: ‘The changes the Government has introduced in the buy-to-let sector were intended to level the playing field and ensure more property was available. But what this petition highlights is that there needs to be better access to finance alongside this, so that these aspiring homeowners can get a mortgage for the property.’[1]

‘The impressive surge in popularity of this petition is clear evidence of the growing frustration among thousands of renters that aspire to own their first home but are struggling to obtain a mortgage from the mainstream banks,’ he continued.[1]

More backing for rental payments to be used to prove eligibility

Criteria

Moving on, Mr Ball observed that many traditional lenders exercise rigid criteria, with proof of rental payments sometimes not taken into account as part of the process.

Concluding, Ball said: ‘As this petition clearly demonstrates there is a need to compile more detailed data on the credit profile of individuals, which will then help lenders to assess their applications when they look to obtain a mortgage. If there is a debate following the petition and it leads to new and improved measures in this space, that will be a positive step for both lenders and these aspiring homeowners.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/3/more-backing-for-using-rent-payments-as-iad-to-mortgage-eligibility