Rental payments should help mortgage applications say MPs
A number of cross-party MPs have stated that a consistently good rental payment record should help them obtain a mortgage.
Earlier this year, a petition on the subject was launched, which went on to receive in excess of 100,000 signatures.
This led to it being considered in Parliamentary debate.
Leading this was Paul Scully, who highlighted that lenders may be able to make a more informed decision if they are a mortgage applicant can cite a consistent financial history. However, the MP for Sutton and Cheam went on to state that this is not the only thing which should be considered by lenders, with long-term income stability being a key factor.
Highlighting that financially reliable renters may not receive the right recognition was Martin Whitfield. The MP for East Lothian stated: “Many people with a long history of paying rent on time and in full are unable to take advantage of the financial sense that they have demonstrated, perhaps even over decades. Paying rent is not a credit, but in the mortgage affordability test the payment of rent — weekly, monthly or quarterly — over a long period of time shows that the individual can afford that rent.”
Sharing this view was David Jones, MP for Clwyd West. He drew attention to the discipline which regular rental payments required, and that this should be of interest to mortgage lenders when they are considering an application.
“I strongly support the proposition that credit reference agencies should record rental payments and take them into account. Not only might that assist in connection with mortgage applications, it would show a history of dependability that would open up other benefits, such as not requiring prepayment meters, making consumer credit easier, and better supporting tenants who wish to move into another rented property.”